In fact, it will be possible to stop dementia through the power of games, Atari founder Nolan Bushnell said on "Squawk on the Street."

"The ultimate virtual reality is reality, where you actually go into an environment that is alive and you solve problems, and you put in context the things that you're learning," Bushnell said from technology conference South by Southwest in Austin, Texas.



Today's entertainment sphere is full of powerful, cheap, good-for-your-brain tools — but it's sometimes difficult to get them past the "gatekeepers" in the education industry, said Bushnell, who also founded Chuck E. Cheese's. Bushnell, who now has an education start-up called BrainRush, said he looks forward to the challenge.

"I've been doing this a long time, and I can't tell the difference between my work and my play, which is the real benefit," Bushnell said.