Atari Games Corporation was an American company that made arcade video games. It was active from 1985 to 1999, and later became Midway Games West Inc. until 2003. The company was created when the coin-operated video game part of Atari, Inc. 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. These games used the Tengen label for legal reasons. Some games developed by Atari Games include Tetris, Road Runner, RoadBlasters, Primal Rage, Hard Drivin', and San Francisco Rush.
Atari Games operated on its own from 1987 until 1994, when it was combined with Time Warner Interactive. In 1996, Atari Games was sold to WMS Industries. The company then became part of Midway Games when Midway was separated from WMS in 1998. After stopping using the Atari name, the company ended its operations in 2003. Its previous 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, Atari, Inc., a division of Warner Communications, lost $500 million during the first three quarters of the year. However, its arcade coin-operated games division was the only part of the company that earned money. In 1984, Warner sold Atari’s consumer products division to Jack Tramiel, who renamed the company Atari Corporation. Warner kept the coin-operated games 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 (such as 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 from before the change. 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 the company, 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 to a group of employees led by Hideyuki Nakajima, who had been president of Atari Games since 1985. Because the company was now divided among three groups—Warner (40%), Namco (40%), and employees (20%)—none of them had control, and Atari Games became an independent company. Atari Ireland, a subsidiary of Atari Games, manufactured games for the European market. While under Namco’s ownership, Atari Ireland also produced Sega’s Hang-On (1985) for Europe.
Atari Games continued making arcade games and units. Starting in 1988, it also sold cartridges for the Nintendo Entertainment System under the Tengen brand. The Tengen name was used for its home consumer division, which released games. Most of these games were developed by Atari Games staff. In the late 1980s, Atari Games and Nintendo had legal disputes over rights to Tetris, which Tengen had published for the NES, and over Tengen’s use of a method to bypass Nintendo’s lockout chip, which blocked unauthorized games. 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 obtaining some patent licenses.
In 1989, Warner Communications merged with Time Inc. to form Time Warner. In 1994, Time Warner regained 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 grouped under the Time Warner Interactive banner.
On July 12, 1994, Nakajima died at age 64. Ed Logg, a former chief programmer at Atari, briefly left the company to join Electronic Arts but returned in 1995 to manage home console games. Time Warner Interactive, through Atari Games, became part of Nintendo’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 move restored the use of the Atari Games name, while the home consumer division was merged into Williams Entertainment. According to Atari Games president Dan Van Elderen, Time Warner had 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 would not return to the video game industry until the creation of Warner Bros. Interactive Entertainment on January 14, 2004.
On April 6, 1998, WMS Industries spun off its video game assets as a new company called Midway Games, which later took control of the Atari Games division. That same year, 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 was disbanded on February 7, 2003, after poor sales. The closure affected 30 employees, including three who had worked at Atari since the 1970s. Two planned games, Nitrocity and Gladiator: The Crimson Reign, were also cancelled.
Although no longer active, Midway Games West remained as a holding company for the copyrights and trademarks of games originally made by Atari Games. In February 2009, Midway filed for bankruptcy, and in July 2009, most of its assets were sold to Warner Bros. Interactive Entertainment. This move returned all Atari Games properties to Time Warner.