Space Race (video game)
Development of "Space Race" began soon after the founding of Atari in Summer 1972 under the name "Asteroid". Co-founders Nolan Bushnell and Ted Dabney had the initial idea for the game while developing the 1971 "Computer Space", the first arcade video game, but felt the more complicated "Computer Space" was a better first game. After leaving Nutting Associates and founding Atari in May 1972, Bushnell spent a few days designing "Asteroid", but soon had to drop the project to focus on running the company. After the release of "Pong", Atari's first game, development resumed on the title in Spring 1973. Dabney has claimed credit for the game's final design, though "Pong" designer Allan Alcorn has stated that he and Bushnell may have been involved as well. "Asteroid", codenamed VP-2, was designed to be a racing game that would be simple to create to fulfill an earlier contract with Bally Midway; Atari had initially offered "Pong" during its development to fulfill the contract, but had been rejected. The company was also interested in producing a very different game from their previous success, as they felt that innovative design was what would separate them from their competitors, which they saw as flooding the market with "Pong" clones rather than making new video games.
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.