Atari
In 1971, Nolan Bushnell and Ted Dabney founded a small engineering company, Syzygy Engineering, that designed and built "Computer Space", the world's first commercially available arcade video game, for Nutting Associates. On June 27, 1972, the two incorporated Atari, Inc. and soon hired Al Alcorn as their first design engineer. Bushnell asked Alcorn to produce an arcade version of the Magnavox Odyssey's Tennis game, which would be named Pong. While Bushnell incorporated Atari in June 1972, Syzygy Company was never formally incorporated. Before Atari's incorporation, Bushnell considered various terms from the game Go, eventually choosing "atari", referencing a position in the game when a group of stones is imminently in danger of being taken by one's opponent. Atari was incorporated in the state of California on June 27, 1972.
In 1973, Atari secretly spawned a competitor called Kee Games, headed by Nolan's next door neighbor Joe Keenan, to circumvent pinball distributors' insistence on exclusive distribution deals; both Atari and Kee could market virtually the same game to different distributors, each getting an "exclusive" deal. Joe Keenan's management of the subsidiary led to him being promoted president of Atari that same year.
Atari 2600
Despite Bushnell's retirement in 1978, Warren Robinett's invention of the first action-adventure game, "Adventure", was developed the same year and changed the fundamentals of gaming as it unlocked a game with a "virtual space bigger than the screen". However, the VCS still had gained a killer application to sell the console, and it had suffered the loss of programmers David Crane, Bob Whitehead, Larry Kaplan, and Alan Miller, the company's "Fantastic Four", who had programmed most of the successful VCS games to that point. The four left Atari disgruntled over Warner's oversight of the company and treatment of programmers in 1978, and formed the firm Activision, which would give rise to third-party software for the VCS. While the VCS was the best-selling console during the 1979 holiday season with over 1 million units sold, Atari saw newfound competition from the Mattel Intellivision and Magnavox Odyssey², both systems that also used swapable ROM cartridges.
Atari then licensed the arcade hit "Space Invaders" by Taito, which greatly increased the unit's popularity when it was released in January 1980, doubling sales to over 2 million units. The VCS and its cartridges were the main factor behind Atari grossing more than $2 billion in 1980. Sales then doubled again for the next two years; by 1982, the console had sold 10 million units, while its best-selling game "Pac-Man" sold 7 million copies. The console also sold 450,000 units in West Germany by 1984.