I have a question. “Have you played Atari today?”

When the Fairchild Channel F came along, Atari realized that the market for home video game consoles that could only play one game, like Pong, was fading fast. So, in 1976, Atari frantically started working on project “Stella,” a new cartridge-based home video game system.

As the project neared completion Nolan Bushnell (founder of Atari) ran out of money, so he sold the company to Warner Communications for $28 million (October 1976). Warner sunk over $100 million into Atari, expecting Stella (now dubbed the Video Computer System, or simply VCS) to be a huge success. They knew Atari could make lots of money selling software for the new system.

VCS sales were boosted by the deal Atari had already set up with Sears & Roebuck to distribute its Home Pong units. Sears was able to sell its own version of the VCS called the Sears Video Arcade, and VCS cartridges under its “Tele-Games” label. Atari, in turn, was able to get tremendous exposure for its console since Sears had hundreds of store locations nationwide.

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