To those born into the console era, whose formative gaming education came from Nintendo, Sega, or PlayStation, Atari feels like an amorphous presence in the world of videogames: a once-important name that has been diluted by countless mergers, acquisitions and bankruptcies. A titan of the arcade era whose relevance had dwindled almost to nothingness by the turn of the millenium.

Many younger gamers have little idea of the extent to which this one company laid the foundation of the modern video game industry, beyond recognizing the name, and perhaps knowing that the Atari 2600 was an early home console. But the truth is that the modern video game industry owes almost everything to Atari and its two founders.

Atari co-founders Ted Dabney and Nolan Bushnell, with head of finance Fred Marincic and Pong creator Allan Alcorn.

Atari was a defining force in both arcades and the home computers throughout the 1970s and 80s (it wasn’t until 1993 that it finally shut down its computer manufacturing arm). In one form or another, it brought us everything from Pong to Tempest, Centipede to the famously dreadful E.T. The Video Game. But Atari’s games are only part of the story. Atari’s founders invented the video game arcade cabinet, helping to create the arcade culture that gave birth to modern video games. Without Atari, the history of games would have been completely different. The story of its rise and its many, varied deaths is a fascinating one that spans the entirety of modern gaming’s history, from the early 70s to its latest bankruptcy in January 2013.

Visions of a Coin-Operated Future

The variety of corporate metamorphoses that Atari has undergone over the years is such that its history becomes difficult to untangle after a certain point, but Atari’s story starts as world-changing things very often do: with one person and a great idea. Atari’s two founders, Nolan Bushnell and Ted Dabney, met in 1969, where they were both working for a company called Ampex in Redwood City, California. Years earlier, as an electrical engineering student in Utah, Bushnell had developed a fascination with one of the very first video games, Spacewar, developed on an improbably giant computer at the Massachusetts Institute of Technology in 1962 by Professor Steve Russell and two of his students. He’d sneak into the college’s computing lab at night with a fraternity brother to play it.

Spacewar! in action. Photo by <a href="http://www.flickr.com/people/35034362831@N01">Joi Ito</a>.

Bushnell’s college was important. Computer graphics were invented at the University of Utah in the 1960s by a man named Ivan Sutherland, one of computer science’s pioneers. The University had, at the time, state of the art computer equipment. This made Bushnell one of a relatively very small number of people who could play the earliest video games, including Spacewar, on campus computers.

While attending school, Bushnell also worked in an “amusement arcade” called Lagoon Amusement Park during the holidays, and it occurred to him that the electronic game could work as a coin-operated machine. Arcades at that time were halls of pinball cabinets and other coin-operated entertainments, like slot machines and ball-throwing gambits and other trivial games of skill and chance. What Bushnell essentially envisioned, though, was the 1980s arcade, packed with glowing coin-op game cabinets and spellbound teens - places where an entire generation would fall in love with video games. These places would not have happened without him, and his company, Atari, would become one of the biggest names in this future world.

The Perils of Pinball

In post-war America pinball was demonised in the same way that video games frequently have been in the decades since. In the 1940s and 50s, the most rebellious, coolest thing you could do as a young person in many parts of America was to hang out near a pinball machine. Parents and other worried adults banded together to protest the machines, fearing that their children were being corrupted by their bright, noisy influence, transformed into time-wasting entertainment junkies and being led into gambling. Pinball machines were actually made illegal in some parts of the country - perhaps most famously, New York mayor Fiorello LaGuardia ordered the seizure of thousands of machines in January 1942 and smashed them up for materials to help with the war effort. Pinball remained technically illegal in New York until 1976. Imagine, against this backdrop of moral panic, how people reacted to the introduction of electronic video games, and to the transformation that the arcade would undergo.

This was computing, in the 1950s. Photo: <a href="http://ftp.arl.mil/ftp/historic-computers/">U.S. Army</a>.

But in the early 1960s, computers still required a small room to house them. It wasn’t until the tail-end of the decade that Bushnell, along with Ted Dabney, would develop the first ever coin-operated arcade machine for a company called Nutting Associates. It was called Computer Space. The game released in 1971, and although it fell short of the manufacturer’s expectations and was considered something of a failure by Nutting (it was just too complicated to catch on in a big way outside of college campuses, Nolan later posited), it still sold 1500 units and made Bushnell and Dabney enough money to strike out on their own and continue making coin-operated electronic games.

“ Pong was the first game program Al Alcorn ever created.

The mediocre-performing Computer Space was the first ever commercially-sold video game, but it was the newly-founded Atari’s first game that would set the stage for the rapid evolution and soaring popularity of the arcade. In 1972, Bushnell attended a demonstration of the first-ever home video game console, the Magnavox Odyssey - a brown-and-beige plastic box released in August 1972 that played a small variety of silent games, including Table Tennis, a competitive tennis game that probably looks pretty familiar to you. The Magnavox sold around 330,000 across the North America and Europe, where it was released in 1973.

Pong would change everything. Photo: <a href="http://commons.wikimedia.org/wiki/User:Rauglothgor">Chris Rand</a>.

Magnavox’s tennis game was far from the first, of course. On the University of Utah campus computers, Bushnell likely played a few of them; a version of tennis called Tennis for Two was created as far back as 1958.

But none would break out like Atari’s Pong, released in 1972. It wasn’t Bushnell himself who created the program for Atari, but a new hire by the name of Al Alcorn, who had worked at Apex alongside Atari’s founders as a junior engineer and had never so much as seen a video game until Bushnell showed him Computer Space. Pong was the first game program he ever created. Not bad, as far as starts go.

Nobody actually expected Pong to go anywhere; Al Alcorn, famously, was assigned it as a project to test his abilities, and it was never intended to be a commercial product. But what Al made, after months of work making it more efficient, turned out to be a lot of fun. The differences between Pong and the Magnavox tennis games might not seem that obvious now, but they were hugely significant then, especially within the technical confines of the time. Pong’s ball sped up the longer the game went on, and pinged off the paddles at different angles depending on where it was hit. The gaps at the top of the screen, actually the result of a quirk in the technology rather than intention, ensured that no game of Pong could go on forever, that there was always that tiny space for the ball to slip past. Plus, it had sound. That might not sound like much, but it turned digital tennis from absurdly dull to incredibly addictive.