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.
Pong
"Pong" was the first game developed by Atari. After producing "Computer Space", Bushnell decided to form a company to produce more games by licensing ideas to other companies. The first contract was with Bally Manufacturing Corporation for a driving game. Soon after the founding, Bushnell hired Allan Alcorn because of his experience with electrical engineering and computer science; Bushnell and Dabney also had previously worked with him at Ampex. Prior to working at Atari, Alcorn had no experience with video games. To acclimate Alcorn to creating games, Bushnell gave him a project secretly meant to be a warm-up exercise. Bushnell told Alcorn that he had a contract with General Electric for a product, and asked Alcorn to create a simple game with one moving spot, two paddles, and digits for score keeping. In 2011, Bushnell stated that the game was inspired by previous versions of electronic tennis he had played before; Bushnell played a version on a PDP-1 computer in 1964 while attending college. However, Alcorn has claimed it was in direct response to Bushnell's viewing of the Magnavox Odyssey's Tennis game. In May 1972, Bushnell had visited the Magnavox Profit Caravan in Burlingame, California where he played the Magnavox Odyssey demonstration, specifically the table tennis game. Though he thought the game lacked quality, seeing it prompted Bushnell to assign the project to Alcorn.