Atari Games Corporation was an American company that made arcade video games. It was active from 1985 to 1999 and later operated as Midway Games West Inc. until 2003. The company was created when the part of Atari, Inc. that made coin-operated video games was moved by its owner, Warner Communications, into a partnership with Namco. This was one of several companies that later used the name Atari.
Atari Games made and sold games for arcades using the Atari brand. It also created games for home systems like the Commodore 16, Commodore 64, Game Boy, and Nintendo Entertainment System. For legal reasons, games for these systems were released under the name Tengen. Some games developed by Atari Games include Tetris, Road Runner, RoadBlasters, Primal Rage, Hard Drivin', and San Francisco Rush.
Atari Games worked independently starting in 1987 after Namco sold its controlling share. It became part of Time Warner Interactive in 1994. In 1996, the company was sold to WMS Industries and later became part of Midway Games when Midway separated from WMS in 1998. The company stopped using the name Atari and ended operations in 2003. Its assets were later sold back to Warner Bros. Interactive Entertainment (now Warner Bros. Games) in 2009 after Midway went out of business.
History
In 1983, the Atari, Inc. division of Warner Communications lost $500 million during the first three quarters of the year. At that time, only the arcade coin-op division of Atari made money. In 1984, Warner sold Atari's consumer products division to Jack Tramiel, who renamed the company Atari Corporation. Warner kept the coin-op division and other assets, and changed the name of Atari, Inc. to Atari Games, Inc. The agreement between Tramiel and Warner required Atari Games to always include the word "Games" after "Atari" on its logo and prohibited Atari Games from using the Atari brand in the consumer market (computers and home consoles). Atari Games kept most of the same employees and managers from the old Atari, Inc. and continued many of its projects. In contrast, Atari Corporation paused projects and reduced staff and operations.
In 1985, Warner Communications and Namco formed a new company called AT Games, Inc. Warner transferred the coin-operated games division of Atari Games to this new company. Namco owned the majority of AT Games, while Warner held 40%. Warner later renamed Atari Games, Inc. to Atari Holdings, Inc., and AT Games became Atari Games Corporation. Later, Namco sold 33% of its shares in Atari Games to a group of employees led by Hideyuki Nakajima, who had been the president of Atari Games since 1985. After this sale, Warner, Namco, and the employees each held shares in Atari Games, and no single group had control. This made Atari Games an independent company. Atari Ireland, a subsidiary of Atari Games, manufactured games for the European market and also produced Sega's Hang-On for Europe during Namco's ownership.
Atari Games continued making arcade games and, starting in 1988, sold cartridges for the Nintendo Entertainment System under the Tengen brand. Tengen was used for the home consumer division, which released games developed by Atari Games staff. In the late 1980s, Atari Games and Nintendo had legal disputes over rights to Tetris and Tengen's use of a method to bypass Nintendo's lockout chip. These legal battles were separate from those involving Atari Corporation, which also had lawsuits with Nintendo in the late 1980s and early 1990s. The case was settled in 1994, with Atari Games paying Nintendo cash damages and using several patent licenses.
In 1989, Warner Communications merged with Time Inc. to form Time Warner. In 1994, Time Warner reacquired control of Atari Games and made it a subsidiary of its Time Warner Interactive division. Initially, Atari Games kept its brand for arcade games, but the Tengen brand was replaced with the Time Warner Interactive label for home console games. By mid-1994, the names Atari Games, Tengen, and Time Warner Interactive were all combined under the Time Warner Interactive banner.
On July 12, 1994, Nakajima died at the age of 64. Ed Logg, a chief programmer at Atari, briefly left the company to join Electronic Arts but returned to Atari Games in 1995 to lead its home console games. Time Warner Interactive, through Atari Games, became part of the Nintendo Ultra 64's Dream Team in the mid-1990s.
In April 1996, after a failed attempt by Atari co-founder Nolan Bushnell to buy the company, Atari was sold to WMS Industries, which owned the Williams, Bally, and Midway arcade brands. This allowed the Atari Games name to return, while the home consumer division was merged into Williams Entertainment. Atari Games president Dan Van Elderen noted that Time Warner decided to leave the video game business in 1995 and asked Atari Games to find a buyer, which surprised him because parent companies usually choose buyers for subsidiaries. Time Warner did not return to the video game business until the creation of Warner Bros. Interactive Entertainment on January 14, 2004.
On April 6, 1998, WMS Industries separated its video game assets into a new company called Midway Games, which took control of the Atari Games division. At the same time, Hasbro Interactive acquired the Atari brand for home use from JTS Corporation. These ownership changes led to Atari Games Corporation being renamed Midway Games West Inc. on November 19, 1999, ending the use of the Atari Games name.
In 2001, Midway Games left the arcade industry due to declining demand. Despite this, Midway Games West continued making home games until it closed on February 7, 2003, after poor sales. The closure affected 30 employees, including three who had worked at Atari since the 1970s. Two games, Nitrocity and Gladiator: The Crimson Reign, were also cancelled.
Although Midway Games West was no longer active, it remained as a holding company for Atari Games' copyrights and trademarks. In February 2009, Midway filed for bankruptcy and sold most of its assets to Warner Bros. Interactive Entertainment. This brought all Atari Games properties back to Time Warner.