The 7th Console War
Posted: Thu Jul 10, 2025 8:51 am
By the late 1970s, Atari had made an important decision: to abandon arcade games (the machines in arcades) and dedicate itself to personal gaming, home entertainment. By 1980, it had already sold three million Atari 2600 consoles and had become the fastest-growing company in the history of the American market. Other companies like Fairchild Semiconductor and Magnavox had launched their own consoles, but Atari's sales were doubling every year. It wasn't until Mattel introduced the Intellivision with the game Las Vegas Poker & Blackjack that the real war broke out. In keeping with the times, that war wasn't fought in the office, but on television.
In Mattel's first commercial, George Plimpton (a well-known actor and journalist) compared the two consoles during prime-time television, with the Atari 2600 severely handicapped, whose graphics were worse than those of the Intellivision. "The closest thing to the real thing," the commercials proclaimed. Atari, however, maintained its advantage for two more shop years thanks to its price ($100 over Mattel's $299), as it retained the rights to almost all arcade games.
Mattel sold 175,000 consoles and expanded its game library, eventually forming its own software division. The identity and location of the five programmers who made up the original team were kept secret to prevent Atari from making them a counteroffer they couldn't refuse. They were known within the company as the "Blue Sky Rangers." That was the way things were.
Colecovision (Coleco) arrived in 1982 and sold half a million consoles in its first year, licensing several arcade games for its product and further dividing the market. This war ended when Warner bought Atari and fired its founder due to disagreements within the board of directors. Warner wanted to challenge the competition by making ET, the video game, a major Hollywood production, and the competition responded. ET, the game, was a complete disaster. Millions of dollars in losses were reported, and the companies closed in what could be called the "console bubble burst."
In Mattel's first commercial, George Plimpton (a well-known actor and journalist) compared the two consoles during prime-time television, with the Atari 2600 severely handicapped, whose graphics were worse than those of the Intellivision. "The closest thing to the real thing," the commercials proclaimed. Atari, however, maintained its advantage for two more shop years thanks to its price ($100 over Mattel's $299), as it retained the rights to almost all arcade games.
Mattel sold 175,000 consoles and expanded its game library, eventually forming its own software division. The identity and location of the five programmers who made up the original team were kept secret to prevent Atari from making them a counteroffer they couldn't refuse. They were known within the company as the "Blue Sky Rangers." That was the way things were.
Colecovision (Coleco) arrived in 1982 and sold half a million consoles in its first year, licensing several arcade games for its product and further dividing the market. This war ended when Warner bought Atari and fired its founder due to disagreements within the board of directors. Warner wanted to challenge the competition by making ET, the video game, a major Hollywood production, and the competition responded. ET, the game, was a complete disaster. Millions of dollars in losses were reported, and the companies closed in what could be called the "console bubble burst."