As a young programmer Bailey was hired by General Motors and trained in assembly language programming. She worked there for two years on displays, and microprocessor-based cruise control systems. She became interested in Space Invaders and the world of arcade games, another application of the work she was doing at GM. She found out that Atari was using the same microprocessor in its games.
In 1980, Bailey joined Atari's coin-op division, where she was the only woman. In an interview Bailey recalled that Atari had a notebook of possible game ideas at the time. Of the 30 or so entries the only one without "lasering or frying things" was a short description of a bug winding down the screen. "[I]t didn't seem bad to shoot a bug".
Bailey left Atari in 1982 and went to work at Videa (also renamed, Sente Technologies), founded by three former Atari employees. In 2007, she was the keynote speaker at the Women in Games International Conference.  Bailey holds M.Ed. and M.A. degrees and teaches as a faculty member in the department of Rhetoric and Writing at the University of Arkansas at Little Rock.
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- Ortutay, Barbara (30 June 2012). "Woman behind 'Centipede' recalls game icon's birth". Yahoo! Finance. Associated Press. Archived from the original on 10 March 2014.
- Alexander, Leigh (27 August 2007). "The Original Gaming Bug: 'Centipede' Creator Dona Bailey". Gamasutra. Retrieved 3 April 2015.
- Kent, Steven L. (2001). The Ultimate History of Video Games: from Pong to Pokemon and beyond...the story behind the craze that touched our lives and changed the world. Prima. pp. 160–162. ISBN 978-0-7615-3643-7.
- Ortutay, Barbara (29 June 2012). "Iconic Atari turns 40, tries to stay relevant". Yahoo! News. Associated Press.
- "People | Rhetoric and Writing". University of Little Rock Arkansas. Retrieved 15 November 2012.
- Carol Shaw, considered the first female video game designer.
- Brathwaite, Brenda (3 August 2007). "Q&A: How Centipede Co-Creator Bailey Got The Bug". Gamasutra. Retrieved 4 April 2014.
- Hester, Larry (3 July 2012). "Interview: Dona Bailey Speaks On Creating 'Centipede' And It's Evolution". Complex. Retrieved 4 April 2014.
- Perry, Tekla; Carol Truxal; Paul Wallich (1982). "Video games: the electronic big bang" (PDF). IEEE Spectrum 19 (12): 20–33. doi:10.1109/MSPEC.1982.6366913.
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