excellent summary posted on slashdot by Lynxpro
1972 - Nolan Bushnell co-founds the company named Atari, Inc. The genius Al Alcorn designs Pong. Pong becomes a big success and Atari essentially creates an entire industry. Atari gives birth to all sorts of interesting things and also employs Steve Jobs. Atari is primarily an arcade game company but wants in on the consumer market. It makes stand-alone home game systems that Sears sells in their stores. But Bushnell is trying to fund the development of the VCS (Atari 2600) and ends up selling out to Warner Communications (later Time Warner, AOL Time Warner, etc.) for $26 million. Bushnell had to pass up funding Jobs and Wozniak's Apple I prior. Warner pumps in a large amount of money but is under pressure to make the company profitable. In 1977, the Atari 2600 VCS hits the market. 1979 becomes an interesting year; Atari brings out the 400 and 800 8-bit computer line, cancels their failed pinball division, and Nolan Bushnell leaves the company. By 1982, Atari Inc. is the fastest growing company in American business history. It controls over 90% of the videogame industry and is the only company that makes arcade videogames and has a home console. But, Atari Inc. later collapses. From 1980-82, many talented programmers leave Atari to form their own companies, such as Activision and Imagic. Atari Inc. does not adequately control the third-party market for 2600 cartridges and cannot guarantee their quality. Atari itself botches up E.T., the 2600 version of Pac-Man, and many other titles that year. The 5200 is brought to the market but isn't backwards compatible with the 2600. Commodore is eating into everyone's 8-bit computer sales with the Commodore 64, which they can market cheaper (comfortably) than their other competitors such as Atari, Texas Instruments, and Apple because Commodore owns MOS Technologies, who manufacturers the CPU used in all of those machines, the 6502. Atari Inc.'s CEO, Ray Kasser ("Yar's Revenge" is named after him) leaves the company under suspicion of insider trading. The videogame (non-arcade) industry collapses in 1984 but is set for a rebirth. Atari is ready for a turnaround with the 7800 and a slew of computers their customers wanted to buy. However, Atari's spectacular losses drove Warner Communications stock in the toilet and management was fighting off a hostile takeover attempt from Rupert Murdoch, who eventually loses out and buys Twentieth Century Fox instead. But, the pressure on Warner stock forces the company to sell Atari just for good press. Warner sells the consumer division of Atari Inc. for $350 million in promissory notes to Jack Tramiel in 1984 (freshly ousted from Commodore) for a 75% stake (Warner retains 25% because Steve Ross knew videogames would come back - he also refused to sell Atari to Philips because Philips wanted 100% control). The figure is based upon the amount of Atari 800XL's in the warehouses valued at $80 a piece. Tramiel stupidly passes up purchasing the arcade division for a mere $10 million more. So Atari Inc. is split up in 1984 between newly renamed Atari Corp. under Jack Tramiel and Co. and Atari Games Inc. (later Atari Games Corp.) which is the arcade division. Atari Corp. has the rights to the brand "Atari" for computers and home videogames if they decide to return to the market. Atari Games had exclusive right to the brand for the arcade games (which later causes extreme confusion to Joe Consumer). Tramiel fires 9,000 employees and sets about creating the ST line of computers to revive Atari, and it works. But at the same time, Nintendo revives the home game industry in the U.S. in its own image. By 1986, Atari Corp. wants back in the industry and releases the 7800 game system which had been scheduled to be released in 1984 had the Tramiel takeover not happened. Unfortunately, Nintendo locked in all their third-party developers into exclusive contracts and it takes pressure from an anti-trust case from both Atari Corp. and Atari Games Corp. to cause Nintendo to relent (Atari Corp. lost the case, surprisingly). By this time, Atari Games is releasing home videogame titles under the brand Tengen. In 1991, Time Warner tries to reacquire both Atari Corp. and Atari Games Corp. (they did, they had sold out to Namco for 75% but repurchased it), but the Tramiels refuse to sell. Atari Corp. releases the Lynx. The home computer industry is starting to fail for Atari (and Commodore Amiga) because PC clones have finally dipped in price in comparison to their features, and later drives both companies from the market. Atari later follows that up with the Jaguar. Time Warner foolishly sells Atari Games Corp. (after having renamed it Time Warner Interactive for 1 1/2 years) to WMS Industries in 1996 (Williams-Midway, before they spun off Midway from their gambling machine company). WMS ends production of Atari arcade games in Silicon Valley. Time Warner refused to sell Atari Games back to Nolan Bushnell for anything under $50 million. Also in 1996, the Tramiels merge Atari Corp. into the hard drive company JTS Industries as the company dumps the Jaguar. JTS later goes into bankruptcy and Hasbro Interactive walks in and buys all the rights to Atari Corp. for a cool $10 million. Hasbro Interactive revives the brand while Midway drops "Atari Games" as a brand. Hasbro management later sells Hasbro Interactive to Infogrames of France, a wholly-owned subsidiary of the European Union, Inc. In 2003, Infogrames renames the American division "Atari, Inc." Also in 2002-2003, Midway shuts down its westcoast division office, formerly known as the Atari Games Corp. That's the long and the short of it. I also recommending visiting www.atari-history.com for a more detailed edition of this info... I consider myself an Atarian, having grown up with the Atari 2600, and owned the 7800, the Lynx, the Jaguar, the 1040ST, the Falcon, shares in Atari Corp. and participated in shareholder's meetings... Atari is dead, long live Atari...

-- MattWalsh - 05 Sep 2003