Read Gamasutra‘s 20-page history of Atari’s golden years. I’m four pages in, and already fascinated. It’s the disaster that never stopped making money – until it did stop making money.
Here’s a delicious quote from Nolan Bushnell, regarding the policies of corporate owners Warner Bros., which thought it absurd to develop a superior replacement for the 2600 or allow anyone to develop software for their new line of home computers.
“I felt that the computer system should not be a closed system, we needed to have third party software developers. I could see Steve Jobs out evangelizing, and Atari was saying that if you write software for the Atari computers, we will sue you. I just thought that was foolhardy. They were from the record world, where you sue people.”
So they fired him, and new CEO Ray Kassar reorganized the company to match how he’d done business in the textile trade, implementing dress codes, canceling next-gen R&D projects, and describing the engineers that created the wealth as “spoiled brats.”
Selling 2600s like socks was highly profitable until the market realized that games and consoles weren’t much like socks. Kassar was eventually kicked out after selling thousands of shares 23 minutes before the publication of an earnings report that wiped almost half of their value.
Atari: The Golden Years — A History, 1978-1981 [Gamasutra]