Atari Corporation

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Atari Corporation
Fate Closed, properties sold
Successor(s) JTS Corporation (1996-1998)
Atari Interactive (division of Hasbro Interactive) (1998-2001)
Founded 1984
Defunct 1996
Headquarters United States
Key people Jack Tramiel
Products Atari 2600
Atari 5200
Atari 7800
Atari Jaguar
Atari Lynx
Atari ST computers
Atari XE Computers
Atari Portfolio
others

Atari Corporation was an American manufacturer of computers and video game consoles from 1984 to 1996. Atari Corp. was founded in July 1984 when Warner Communications sold the home computing and game console divisions of Atari to Jack Tramiel. Its chief products were the Atari ST, Atari XE, Atari 7800, Atari Lynx, and Atari Jaguar. The company reverse merged with JTS Inc. in 1996, becoming a small division, which itself closed when JTS liquidated the IP to Hasbro Interactive in 1998.

History[edit]

Atari ST

Atari Corp. was founded in July 1984 when Warner Communications sold the home computing and game console divisions of Atari to competitor Commodore International's recently resigned founder Jack Tramiel. Warner sold the divisions for $240 million in stocks under the new company.

Under Tramiel's ownership, Atari Corp. used the remaining stock of game console inventory to keep the company afloat while they finished development of their 16-bit computer system, the Atari ST. In 1985, they released their update to the 8-bit computer line—the Atari XE series—as well as the 16-bit Atari ST line. Then in 1986, Atari Corp. launched two consoles designed under the Warner Atari: Atari 2600 Jr and Atari 7800, which had a limited release in 1984. Atari Corp. rebounded, producing a $25 million profit that year. The Atari ST line proved very successful (but mostly in Europe, not the U.S.), ultimately selling more than 5 million units. Its built-in MIDI ports made it especially popular among musicians. Still, its closest competitor in the marketplace, the Commodore Amiga, outsold it 3 to 2. Atari eventually released a line of inexpensive IBM PC compatibles as well as an MS-DOS compatible palm computer called the Atari Portfolio.

In 1987, Atari acquired Federated Group for $67.3 million to have their own retail store shelf space.[1] Atari quickly discovered that Federated's financial problems were far worse than they had believed. During this time, the FBI investigated Atari for reselling Japanese DRAM chips in the US, "in violation of U.S. import laws and contrary to import agreements".[2] Federated was eventually sold to Silo in 1989.[3]

In 1989, Atari Corp. also released the Atari Lynx—a handheld console with color graphics—to critical acclaim. However, a shortage of parts kept the system from being released nationwide for the 1989 Christmas season. As a result, the Lynx lost market share to Nintendo's Game Boy, which had only a monochrome display but was widely available. Also in 1989, Atari Corp. lost a $250 million lawsuit alleging that Nintendo had an illegal monopoly.

As the fortunes of Atari Corporation's ST and PC compatible computers faded, consoles and software again became the company's main focus. In 1993, Atari Corp. released its last console: the Atari Jaguar. After a period of initial success, it failed to meet expectations. It was not nearly as powerful as Sony Computer Entertainment's PlayStation or Sega's Saturn and lacked the extensive third party support its Japanese competitors had easily secured for their consoles.

Atari Corp.'s reverse merger with JT Storage Inc.[edit]

By 1996, a series of successful lawsuits followed by profitable investments had left Atari with millions of dollars in the bank, but the failure of the Lynx and Jaguar left Atari without any products to sell. In addition, Tramiel and his family wanted out. The result was a rapid succession of changes in ownership. In July 1996, Atari merged with JTS Inc., a short-lived maker of hard disk drives, to form JTS Corp.[4] Atari's role in the new company largely became a holder for the Atari properties and minor support; consequently the name largely disappeared from the market.

In March 1998, JTS sold the Atari name and assets to Hasbro Interactive for $5 million—less than a fifth of what Warner Communications had paid 22 years earlier. This transaction primarily involved the brand and intellectual property, which now fell under the Atari Interactive division of Hasbro Interactive.

Major products[edit]

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