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While the Tandy/Radio Shack, Commodore, and Apple are generally credited with ushering in the home computer revolution, Atari was the first to bring arcade-like graphics and sound into the home.

Unlike Tandy, Commodore, and Apple, Atari was a video game developer, as was Coleco, whose Adam computer was another early entry in the home computer race. Nolan Bushnell and Ted Dabney formed a company, Syzygy Engineering, to market Computer Space, the world's first coin-operated arcade game, later changing its name to Atari. The following year, they purchased the rights to Pong, releasing it in 1972.

The following year, Bushnell bought out Dabney, and Atari purchased Cyan Engineering, a group of engineers in Grass Valley, California. Four of the people from Cyan were instrumental in designing the Atari computer. Ron Milner and Steve Mayer developed the prototype for the VCS, originally named the Atari Video Computer System, which later became the Atari 2600, a home video game console. Joe Decuir debugged the VCS, creating a new prototype. Jay Miner was the lead chip designer, going on to later design the Commodore Amiga.

Separately, another early Atari employee, Steve Jobs, and a friend, Steve Wozniak, designed a home computer system using Atari parts. Wanting to concentrate on video games, Bushnell turned down the design. Of course, Jobs and Wozniak went on to form Apple that same year.

Needing capital to launch the VCS, Bushnell sold Atari to Warner Communications. Bushnell remained chairman and chief executive officer but he was forced out by the end of 1978.

Atari launched the VCS in 1977, and the team from Cyan Engineering immediately went to work on its successor, believing that the VCS would be obsolete in three years. Headed by Milner, Mayer, and Decuir, the project resulted in what would become Atari's Color Television Interface Adapter chip, capable of generating two-dimensional, on-screen sprite animation in hardware, for faster performance.

At this point, there were no prepackaged computers on the market, although there were kits that could be assembled. This changed in 1977 when the TRS-80, the Commodore PET, the Apple II were introduced. Yet, these computers had limited graphics, sound, and memory, as well as software libraries.

Although Bushnell was still with the company, his influence had waned. Atari directed its engineering team to turn its planned upgrade to the VCS game console into a home computer. This meant adding programmable BASIC, a keyboard, character set, and support for a disk drive, printer, and other peripherals. Atari had not abandoned its focus on gaming; the design team wanted its new computer to be just as good at gaming as customers would expect from Atari while adding an actual computing experience.

The Atari OS was better designed than QDOS, which later became MS-DOS, and it supported richer graphics. Atari outsourced a BASIC for its new computer, with the stipulation that it fit into 8 KB. Atari hired a programmer by the name of Bill Gates but, as the project stalled for a year, Gates was replaced by Al Miller.

Atari officially formed a computer division in 1978, and the following year the company announced two 8-bit computers, the Atari 400 and the Atari 800, the names corresponding to the amount of memory, 4 KB and 8 KB RAM. However, by the time the machines were released, RAM prices had fallen, so both were released with 8 KB. Although both were computers, the 400 was designed to be a game machine, while the 800 was a full computer.

Despite an expensive advertising campaign, Atari lost $10 million on sales from more than 50,000 computers. In an attempt to recoup, the company began a project create an upgraded set of machines that were less costly to produce, which were incorporated into late-production 400/800 machines and subsequent XL/LE machines.

In 1983, the Atari 1200XL, the first of the XL series, was released. Not well-received, sales of the Atari 800 rose after the release of the 1200XL, as people sought to buy them before they were gone.

Newer XL machines included the 600XL and the 800XL, which were similar but smaller than the 1200XL. The 1400XL added a 300 baud modem and voice synthesizer, as well as a double-sided floppy disk drive, and a slot for a second drive. Atari BASIC was built into the ROM. Then came the 1600XL, 1650XLD, and the 1850XLD. The last of Atari's 8-bit line were the XE series, sold largely in Poland and Eastern Europe.

In 1985, Atari released the Atari ST, with a 16-bit bus and 32-bit processor core, marking the end of its 8-bit family. The 1040ST was the first computer to ship with a megabyte of RAM in the base configuration. The ST was superseded by the Atari STE, TT, MEGA STE, and Falcon computers.

In the early 1900s. Atari returned to its video gaming roots, launching the Atari Jaguar, a 64-bit video game console, which did not do well.



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