With the massive success of the Nintendo Entertainment System, video games are back in a big way. Of course that means everyone wants a piece of the pie, and the original behemoth was Atari with its 2600. The console still has a presence at retailers, going for about $49.99 with a slew of games still available to purchase. But it has had trouble recapturing the mindshare of consumers after the huge video game collapse of ’83 and the bottoming out of the entire market it ’84.
Hoping to capture some good press, Nolan Bushnell, the founder of Atari has agreed to have his company make games for the 2600. Will this plan succeed in taking on Nintendo and Sega? We doubt it!
Nolan K. Bushnell, the man who began the video game craze with Pong in the early 1970’s, plans to return to developing the games for the Atari Corporation.
Mr. Bushnell, who is 45 years old, founded Atari with $250 in 1972 and sold it to Warner Communications Inc. in 1976 for $28 million after his company established the video game as a significant part of American culture. Mr. Bushnell said an agreement had been reached between Atari and his present company, Axlon Inc., which he formed in 1983 to make electronic toys. Axlon will develop video games for Atari.
”We know the Atari system inside and out,” Mr. Bushnell said, referring to the Model 2600 video game he developed in the mid-1970’s. ”The software we can do now almost makes it feel like a completely new system.”
Riding the wave of a resurgence in video games, Atari claims a 20 percent share of what it estimates was a $1 billion market in 1987 and will be twice that in 1988. The company estimates that the market leader, Nintendo, has at a 70 percent share. But the machine that started it all, the Atari 2600, still has by far the largest installed base, at about 26 million, of which ”probably half are in the closet,” Mr. Bushnell said yesterday at a news conference at the Sunnyvale, Calif., restaurant he owns.
”My goal is to get half of those dusted off and back in play,” he said.
In addition to Atari, Axlon has royalty agreements with a toy industry giant, Hasbro; International Ventures Inc., and Imaginations Inc. Axlon lost about $5.5 million on revenues of $7.5 million in 1987 in a generally soft toy market, but Mr. Bushnell said it would be profitable in 1988.
Atari itself has returned to profitability from heavy losses since Warner sold it to Jack Tramiel, a former Commodore International executive, in 1984. Mr. Bushnell said yesterday that looking at Atari made him feel his ”child has grown up, gone through a rocky adolescence and become a responsible, mature adult.”
After his initial Atari venture. Mr. Bushnell went on to found Chuck E. Cheese Pizza Time Theater, a 250-outlet chain combining arcades and restaurants. In 1981, he established Catalyst Technologies, a venture capital firm. He said Axlon would be his sole venture for the foreseeable future.
[Source: The New York Times]