The Atari VCS (Video Computer System) is a second-generation home video game console that was released by Atari on September 11, 1977. The Atari VCS later renamed Atari 2600 is widely credited with popularizing the use of microprocessor-based hardware and games stored on ROM cartridges, a media that was first developed by Fairchild Semiconductor for use with their Channel F home video game console. The conception of the Atari’s home video game console can be traced back to 1973.
Atari purchased an engineering Research and Development Company called Cyan Engineering in 1973 to have a division of Atari that would be focused solely on next generation video game systems. This branch of Atari had been working on a prototype known as “Stella” which unlike prior generations of consoles had a CPU core that would allow it to play multiple games on removable media. The core of the prototype was a cost-efficient version of the famous MOS Technology 6502 known as the 6507. Well “Stella” was in development Fairchild Semiconductor released their CPU based system beating Atari to the market and forcing them to pump additional funds into the development of “Stella”.
Atari’s prototype was still not ready for production, but it was clear to Atari that they needed to release their system before the market was flooded with similar clone systems which had happened after the release of their Pong system. Atari needed to get their system on the market quickly but just did not have the cash flow to get the system completed quickly. Nolan Bushnell ended up approaching Warner Communications and sold the company to them in 1976 for $28 million. With the newly found revenue from the sale to Warner Communications, Atari was able to ramp up the development of Stella and by the time it was ready for release the development had cost approximately $100 million.
Atari launched its prototype in September 1977 under the name Atari VCS for Video Computer System and is the system that is credited with popularizing the use of microprocessor-based hardware with cartridges containing game code. The system came bundled with two joystick controllers, a pair of paddle controllers and one game cartridge of “Combat”. Combat was based on two earlier coin-operated arcade games produced by Atari, Tank and Anti-Aircraft II.
|System||Atari Video Computer System|
Sears Video Arcade
Atari 2600 Jr.
Atari 2800 (Japan)
|Hardware Type||Home Console|
|Release||NA: September 11, 1977|
JP: October 1983
|Discontinued||WW: January 1, 1992|
|Launch Price||$ 199.99 USD|
|Sales||Approximately 30 Million|
|Game Library||526 Games|
The Atari VCS retailed for $199 and had eight additional games available at launch that sold separately. The games that were available at launch were Blackjack, Air-Sea Battle, Indy 500, Basic Math/Fun with Numbers, Star Ship, Street Racer, Surround, Video Olympics and Combat which was sold with the system until 1982. Since Atari already had a relationship with Sears for the distribution of their Pong console they looked to capitalize on this to compete against the Fairchild Channel F and play some needed catch-up as they released the Atari VCS 14 months after the Channel F was released. The systems that were distributed through Sears, Roebuck and Company stores were rebranded as the Sears Video Arcade. Between Atari’s popular brand name in the Arcades and with their Pong home system and Sears household name the Atari VCS was able to sell 250,000 units in 1977.
Sears Tele-Game Video Arcade Commercials
The home video game market was weak in 1978 due to the amount of Pong clones that had been made obsolete by the newer and more powerful systems. Both the Channel F and Atari VCS found themselves in the midst of a vicious round of price-cutting due to this as Pong clones were sold off to discounters for very low prices. Many clone companies were going out of business due to the saturation of the market and both Fairchild and Atari found themselves selling to a market that was completely burnt out on Pong. Atari managed to sell only 550,000 units of the 800,000 that were manufactured in 1978 leading to further financial support needed from Warner Communications to cover their losses. The merger of Atari with Warner Communications led to Nolan Bushnell having less say within Atari and disagreements on development of projects and the direction the company was headed; this ultimately led to Nolan Bushnell leaving the company in November of 1978.
When Atari first merged with Warner Communications Bushnell signed a non-competitive agreement which he did not think much of at the time as the thought of leaving Atari was not something that ever crossed his mind. The non-competitive agreement that he signed would ban him from working in the industry that he helped build and pioneer. Unable to work in the industry Bushnell had to shift his focus elsewhere. Nolan Bushnell founded Chuck E. Cheese’s Pizza Time Theatre while at Atari in 1977. Bushnell’s experience in the amusement park industry and love for entertainment influenced the concept of Pizza Time Theatre. The first location opened in San Jose, California in 1977 as an entertainment restaurant and indoor arcade. When Bushnell parted ways with Atari he purchased the Pizza Time Theatre concept from Warner Communications. Bushnell over the next several years focused on Chuck E. Cheese before moving his focus to developing new innovative products.
The public started to realize that the new generation of systems were able to offer a much more in-depth experience than the first generation of systems and programmers learned how to push the new hardware capabilities. The Atari VCS started to gain in popularity at the beginning of 1979 and by this point Fairchild had given up thinking video games were a passing fad. This move handed the entire quick growing market over to Atari and by the end of 1979 the VCS became the best-selling Christmas gift and console, selling approximately 1 million units.
By the end of 1979 Atari released 26 additional games since its launch, 14 released in 1978 and 12 released in 1979. Atari began 1980 with 35 video games in its library containing exclusives hit arcade games that could be played at home, hits such as Atari’s Football, Breakout and Space War. Atari was able to obtain licensing rights to the smash arcade hit Space Invaders by Taito which greatly increased the systems popularity when it released in January 1980 resulting in doubling the systems sales to over 2 million units. Atari would go on to gross over $2 billion in 1980 mainly due to the success of the Atari VCS and its cartridge sales. Sales would continue to double for the next two years and by 1982 Atari sold more than 10 million Atari VCS consoles with its best-selling game Pac-Man selling 7 million copies.
In 1982 a revised version of the VCS was released with the wood grain removed, the systems were nicknamed “Darth Vader” consoles due to their all black appearance. These systems were the first VCS consoles to be officially called the “Atari 2600” after the unit’s part number CX2600 as the “Atari 5200” was release later that same year.
In 1982 Atari invested heavily in two licensed games, Pac-Man and E.T. the Extra-Terrestrial. Even though Pac-Man became the best-selling game for the Atari 2600 the drastic difference in quality between the port and the arcade version contributed to a loss of consumer confidence in the console. E.T. was rushed to market to make the 1982 holiday season and became a commercial failure frequently cited as a major factor in the video game crash of 1983.
Atari VCS Launch Commercial and Atari 2600 rebrand Commercial
A great deal of low-quality games coupled with the oversaturated home game market ultimately is what led to the video game crash of 1983. Atari’s weakened position led investors to start pulling funds out of video games and Warner Communications began looking for potential buyers for the consumer division of Atari in 1984. By mid-1984, software development for the Atari 2600 had essentially stopped with the exception of games being developed by Atari and Activision. Warner Communication ended up selling Atari’s Consumer Division to Commodore founder Jack Tramiel who shifted the business’ focus to home computers.
The console received one last revision before it was ultimately discontinued in 1992. In 1986 a smaller, cost-reduced form factor was released for $49.99 under the name Atari 2600 Jr. The system was advertised as a budget game system with the ability to run a large collection of games. Production of the Atari 2600 ended on January 1, 1992 and sold approximately 30 million units over its lifecycle.