The Early Videogame Industry: Atari, Nintendo, Sega, and Sony’s Battle for Supremacy

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The Early Videogame Industry: Atari, Nintendo, Sega, and Sony’s Battle for Supremacy
Anthony Ambrosius Aurelius

“Atari rose to critical acclaim and success on a rocket trajectory, becoming the fastest growing company in the history of the U.S., unmatched until the modern day. Atari over leveraged itself by keeping hardware which was antiquated on the market to drive continued sales as the Atari 2600 developed by Atari was a brand which had market recognition, a public which was familiar with it, and thus would guarantee sales revenue. Nolan Bushnell repeatedly pushed for a new console to be developed but was stonewalled after the Warner Bros. film studio took over Atari in 1976 through a corporate acquisition which cost Warner $28,000,000 ($28 million) which equates to $126,249,982 ($126.2 million) as of 2019 when accounting for inflation. Because the Atari 2600 could not replicate and therefore compete with the more robust and cutting edge arcade style videogames, it could not drive sales out of the arcades and into homes. Warner Bros. was able to squeeze 12 years of sales out of the Atari 2600 when it was only designed to yield 2 – 3 years of profit when originally developed by Atari. The most influential reason as to why this was possible is because the engineers who designed the games figured out many data saving techniques (e.g. using repeating textures, repeating animations, different colors of the same sprite etc.) which allowed the increasingly shrinking capabilities of the Atari 2600 to squeeze every last bit of resource out of the hardware it provided.

The issues Atari was experiencing were exacerbated when the 4 core engineers who helped develop the companies game lineup decided to leave and start Activision, where they would create games in a non-corporate environment which better suited them, something completely foreign and contradictive to the corporate construct Atari had become. Atari had kept its hardware a black box in an effort to spur competition but the 4 engineers who left Atari were able to successfully reverse engineer the Atari 2600 system so that they could code games which worked with the console, despite being from a third party game distributor, a relatively unheard of industry model at the time.”

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