Why Did Atari Fail? The Company That Buried Its Games in the Desert

The story

Why did Atari fail? In September 1983, trucks dumped Atari game cartridges in a New Mexico landfill and workers poured concrete over them. One year earlier, Atari was bringing in about $2 billion a year.

This is the story of Atari: the $500 start, Pong, the quarters that jammed the first machine, the Atari 2600, the programmers who walked out and founded Activision, twelve million Pac-Man cartridges, the E.T. game built in about five weeks, the crash of 1983, and the Alamogordo dig in 2014.

Three lessons

1. 1

   Your talent is your product. Atari let its best programmers walk, and they built a rival.

2. 2

   Hype is not demand. Twelve million Pac-Man cartridges, for about seven million buyers.

3. 3

   Protect your quality. When stores filled with bad games, shoppers stopped trusting all of them.

Chapters

1. 0:00Intro
2. 0:23The quarter machine
3. 0:58The console boom
4. 1:31The talent walkout
5. 1:57Twelve million Pac-Man
6. 2:08Five weeks to make E.T.
7. 2:30The crash
8. 2:53The desert
9. 3:28Three lessons

Sources

Every fact in this file is checked against published sources before release. See our standards.

• Encyclopedia.com, Atari Corporation company history (founding, Warner purchase, revenue, 1983 losses, 1984 split)
• CNBC, Ted Dabney, a founder of Atari and a creator of Pong
• IEEE Spectrum, the Atari 2600 (Consumer Electronics Hall of Fame)
• Game Informer, how four programmers founded Activision
• Time, E.T. for the Atari 2600
• KMUW, the video game crash
• CBS News (AP), diggers find Atari's E.T. games in the landfill (April 2014; about 728,000 cartridges buried, per former Atari manager James Heller)