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Another Old-School Tech Firm To Bite The Dust? – Atari Files For Bankruptcy

Rather than labouring an awkward pun out of ‘bite the dust’, I chose to keep this title simple and straightforward out of respect for a company that many of us have fond memories of and because of. Atari is the manufacturer of home video games that a lot of us grew up with, and one that’s responsible for perhaps the Daddy of all games: Pong (and later Breakout which is similarly iconic to this day). Without Atari you could argue that the video game industry would be a very different place…

atari breakout game

photo credit: Idiolector via photopin cc

A Brief History

Formed by Nolan Bushnell in 1972, Atari enjoyed considerable console success during their heyday with the Atari 2600. Since then, the company failed to replicate that success however, and was eventually bought out by Transformers-maker Hasbro in 1998 to become Hasbro Interactive. Two years later Hasbro Interactive though was in turn purchased by the French publisher Infogrames and had the original name ‘Atari’ restored.

Now though the classic games company has filed for Chapter 11 bankruptcy, reportedly in an attempt to move away from Infogrames which is suffering financial challenges of its own. The company hopes to survive intact though and is angling to find a new buyer so it may continue its legacy.

The Latest in a Long Line of Casualties…

Atari isn’t the only one of these old-school tech company to have struggled in the tide of change however, and there are many other companies that have similarly struggled to keep up.

The Atari existed for instance around the time of home computers like the Einstein, the BBC and the then-king ZX Spectrum which introduced many to programming and computers in general. Sinclair Research Ltd, who were responsible for the ZX Spectrum, have similarly failed to adapt to the modern marketplace however and were forced to sell both the name and the hardware line to Amstrad. Since then Sinclair has existed as purely an R&D company, with the company being reduced to just Clive Sinclair himself, a sales rep and one other employee by 1990. In this diminished form Sinclair has released a ‘bike’ (called the Zike) and a wheelchair and is poised to unveil an electric vehicle called the X-1. Amstrad itself is also now highly diminished, having been bought from Sir Alan Sugar by BSkyB and reduced to producing Sky Digital interactive boxes.

Only last year Kodak, another company many of us grew up with, also filed for bankruptcy in a remarkably similar manner to Atari. And we all know how Polaroid has struggled since digital cameras completely replaced the need for their famous Polaroid Camera. Apparently they have now partnered with Lady Gaga who will become the new ‘face’ of the company. Surely that’s the definition of an act of desperation? That said, Kodak filed for chapter 11 bankruptcy way back in 2001 and they’re technically still around…

A personal favourite old-school tech company of mine has also been struggling of late – that being SEGA who dropped out of the hardware game a fair while ago now and underwent major restructuring in the latter half of 2012 resulting in layoffs and ‘streamlining’ of their game development (i.e. cancelling a whole load of games that people were looking forward to). As a huge Sonic fan I can only hope that SEGA isn’t going to be following in the shoes of Atari and Sinclair any time soon…

The Good News

Of course it’s not all doom and gloom, and for every tech horror story there are just as many victories. While you may be mourning the fate of the company that brought you Centipede, the company that brought you Mario is still going strong despite concerns prior to the launch of the Wii. Through a smart transition to family-oriented games, and the implementation of a progressive new control system, Nintendo managed to side-step direct competition with Sony and Microsoft and ended up outselling both of them. Whether the Wii U will be able to repeat that success is less certain, but if Nintendo has shown us anything it’s that they’re not to be underestimated.

Meanwhile, while Spectrums, BBCs, Tatungs and Amstrads may not be around anymore, we should remember that the first Apple Macintosh dates all the way back to 1984 and Apple is certainly still going strong. Meanwhile the original Microsoft Windows 1 was released only a year later, and no one is worrying about Microsoft going bankrupt any time soon.

For business students, for entrepreneurs and for tech aficionados, the trick here is to learn from these stories and to learn from their mistakes and failures. How could the defeated tech giants have adapted to change and pulled a Steve Jobs on the competition? And how can Atari climb back from the brink of doom before it’s too late?

About the Article: The founder of Berkeley Sourcing Group, Greg Fisher, is the brains behind this article. When he is not busy working, he enjoys reading books or playing a good game of chess with his friends. You can visit their website for any kind of information on textile manufacturing.

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