He was born in 1943 in Clearfield, Utah, and was raised in a Mormon household.
By age 10, he was the neighborhood TV repair kid, charging to fix broken TVs. He was an avid chess player and also excelled at the Japanese game Go.
In college Nolan initially floundered as he described himself as a lapsed Mormon who enjoyed the parties and beer too much. So he switched schools and reset his life at the University of Utah.
It worked. Kind of. His grades got better, and his entrepreneurial skills were evident when he got a summer job manning the arcade games at an amusement park- now these weren’t video games-we’re talking ball toss games and the like. He'd tweak the games to increase turnover and pretty soon, Bushnell was promoted, and the amusement park had the highest revenue-per-customer ratio in the industry.
While in college, where he got a degree in electrical engineering, he had access to the university's computer lab and it was here that he came across Spacewar- one of the earliest video games - it was simple, crude, but Bushnell found it completely captivating and it was this game that planted the seed of an idea with Bushnell-he knew: if you could make computers fun, you could make a fortune.
After graduating in 1969, he moved to California and joined Ampex—a high-end video tech firm in Silicon Valley where he met Ted Dabney. Dabney was older, technically brilliant, and shared Bushnell's obsession with games. Bushnell pitched an idea: a stand-alone arcade cabinet running a space combat game on a television screen – something that could be installed in bowling alleys and pizza parlors. At the time, coin-op gaming was dominated by pinball and electro-mechanical machines; the notion of a video game was unheard of.
By 1971 they had a working prototype of a space combat game called Computer Space and they licensed it to Nutting Associates, a small arcade game manufacturer.
They sold about 1,500 units and it grossed around $3 million. But Bushnell, who was confident, bordering on arrogant, was unimpressed with Nutting's management. He felt the company was squandering the game’s potential- he felt that they made the controls too complicated for the casual player and they also didn't share his vision in terms of the huge untapped opportunity.
And so in early 1972, Bushnell and Dabney set up "Atari" —a term from the board game Go that means the equivalent of check in chess.
Their first client was Bally, the pinball king at that time. Bally gave them a $4,000/month contract (about $25,000 today) to develop a driving game and a pinball machine. With that money, they hired their first engineer, a 24-year-old Al Alcorn.
A pivotal moment came soon after when in May 1972, Bushnell attended a demonstration of a groundbreaking home entertainment device: the Magnavox Odyssey, the world’s first home video game console- we mentioned this device in our Adam Osborne episode. The Odyssey included a simple two-player table tennis game played on a TV. Bushnell played it and walked away underwhelmed but inspired. “I didn’t think it was very clever, so I decided to do it better.”
And so in true Silicon Valley tradition, he tasked Alcorn to re-engineer the game- now that’s short hand for copy it but make it better. Alcorn added sound effects, scorekeeping, paddle segmentation, and ball acceleration. By August 1972, the prototype was addictively playable. Bushnell named it Pong.
They placed a test unit at Andy Capp's Tavern in Sunnyvale. The cabinet had no exterior name or branding, just two knobs for players and a brief instruction taped on: “Avoid Missing Ball For High Score”. At first, people were skeptical. Then they got hooked. The young Atari team realized they had a goldmine on their hands.
But there was a problem. The money from Bally had funded Pong. Technically, Bally owned it. Bushnell flew to Chicago and demoed the game. Bally executives didn't see the potential and passed on it.
So the Atari team started making their own cabinets to house the game.
By the end of 1972, 300 units were about to hit the floor and with just 3 phone calls Bushnell had 3 buyers- 100 units each, sight unseen. So now they needed to scale, and fast.
They begged a local bank for a line of credit. The office was overflowing — Pong machines stacked to the ceiling. They had run out of room so Dabney grabbed a saw, cut a hole through the wall into the vacant office next door, and unlocked the front door from the inside. Floor space doubled. No lease, no forms. They explained it to the landlord later.
Hiring was chaos. They grabbed friends, kids off the street, people from unemployment lines. One worker showed up barefoot. Another got caught selling stolen TV sets out of the inventory. One engineer remembered walking in on a guy building cabinets high on acid. Bushnell didn’t care - he fostered a loose, playful atmosphere – he cared more about results than formalities, a stance that would become famous (or infamous) in Atari’s culture. As long as the cabinets were shipping, it was working.
Pong became a nationwide sensation- but it was a simple game. And that meant anyone could clone it. And they did. Dozens of companies began pumping out copycats.
Bushnell didn’t really have a leg to stand on- legally, his hands were tied as Atari had never patented Pong — and even if they had tried, it was based on the Magnavox Odyssey design - Atari themselves had to settle with Magnavox in 1976 for $1.5 million.
And in a weird way, the clones helped. They flooded the market with Pong-style games. Bars, bowling alleys, diners. The public got hooked, and even if 9 out of 10 cabinets weren’t Atari’s, the original still carried the cachet. By mid-1974, Atari had sold thousands of cabinets at $936 each, a figure arrived at with typical precision by Dabney who said: “I looked out the window and saw the number 936 on a license plate.” The whole set up just sounds so haphazard, wild and I’m guessing intoxicating-this really was ground zero for the gaming industry.
Inside the company, though, things were shifting. As Pong exploded, Bushnell’s charisma started to dominate. By all accounts, his ego was inflating as fast as Atari’s sales. This is a quote from Ted Dabney: “After Bushnell realized that we owned a very successful company, he became totally ego driven and didn’t want to share the glory.” Bushnell's take on it was different- he said in relation to Dabney: “When it came to being an executive at Atari, he was an unmitigated disaster.” But in later life Bushnell did reflect on past mistakes with the following quote: "I have made so many massive mistakes of ego, I can't tell you,"
Tensions grew, Dabney got pushed aside. He sold his stake for $250,000 ($1.6 million in today's money) — and walked away in early 1974.
Now firmly in charge Bushnell, still only 30, pushed a new driving arcade game -Gran Trak 10 — an ambitious machine with a steering wheel, gears, pedals. But it was a mess.
The accounting was wrong — nobody had calculated actual build costs. Each unit sold for less than it cost to make. On top of that, the engineering was rushed. By the time they fixed it, Atari had burned through over $500,000 — nearly all the profit from Pong. It was their first real crisis.
Bushnell had to lay off nearly half the company. The freewheeling, beer-on-tap days hit a wall.
But the company was saved by a game called Tank -a 2 player battle game that was a huge hit. It was developed by Kee Games — a secret Atari shell company Bushnell created to sidestep exclusive distribution deals. You see distributors demanded Atari exclusivity by territory, so to sidestep this, Bushnell invented a fake competitor, Kee Games which offered cloned versions of Atari’s titles. It worked beautifully. They doubled their distribution overnight without breaking contracts.
So with the success of Tank, and with Atari in trouble, Bushnell folded Kee into Atari.
By the end of ’74, Bushnell saw where the puck was headed: the living room. So they developed a self-contained home unit that played just Pong.
They shopped it around. No one bit until Tom Quinn, a buyer from Sears came to the Atari office, tried the prototype, and asked: “How many of these can you make?”
Bushnell answered: “Seventy-five thousand.” That in itself was a bluff, they had capacity for just 25,000.
“Double it” Quinn said. “One hundred fifty thousand. We’ll finance production.”
At $98.95 retail, Home Pong became a smash Christmas hit and millions more units were sold as the product hit other retailers.
In 1976, Atari started developing the pioneering Atari 2600- a console that could play multiple games that were loaded onto cartridges — but Atari needed serious backing to allow them to produce it at scale, market it and launch it into American living rooms. That’s when Warner Communications came calling.
They offered $28 million for Atari — half in cash, half in Warner stock — Bushnell took the deal. His own cut came to about $15 million. And while Bushnell stayed in place, he was now answerable to Warner executives. For Atari, it was the start of the end of an era, the end of very odd work hours, of casual management, of hot tubs and beer taps.
At first, it seemed fine. The money was flowing, the engineers were building, and the 2600 launch got greenlit.
But Bushnell was double-jobbing- as he said himself later- “I had five-year ADD, once something was running, I got bored.” And so not only was he overseeing the 2600 console rollout, but he was also setting up a new venture: a pizza joint with video games and singing robots. Chuck E. Cheese’s Pizza Time Theatre opened in May 1977. The concept was strange and brilliant. Order pizza, play coin-op games, and sit through a show starring an animatronic mouse in a bowler hat crooning to disco tracks.
Bushnell called it “Disney meets Las Vegas for kids.”
Back at Atari, the 2600 launched a few months later in September 1977 at $199. Early sales were modest, but well below targets- they didn’t have any new blockbuster games and at the same time, the arcade division, once Atari’s crown jewel, was stagnating.
By early 1978, the strain was showing. Bushnell wanted hardware innovation- move on from 2600; Warner thought the console could be salvaged- the relationship became frayed and Bushnell was becoming increasingly sidelined. Atari had manufactured 800,000 2600s and many of them remained unsold, and at a heated budget meeting in Warner’s boardroom that November, Bushnell was pushed out.
Ray Kassar, a former textile executive, took over from Bushnell. He didn’t care about engineering hackathons. He cared about scale. Atari’s programmers hated him. The feeling was mutual- he called them “Prima donnas.” That attitude would come back to haunt him. The creative staff felt ignored and underpaid, and as a result, some of Atari’s best engineers and developers left and they founded Activision — the first independent game publisher- known today of course as Activision Blizzard and with a market cap of over $66 billion.
This exodus of top talent, together with Warner’s decision to drastically cut Research and Development, combined with the sidelining of Bushnell would lay the foundation for Atari’s demise, but in the short term, it looked like Kassar and Warner were onto a winner.
Because in early 1979, Kassar struck a fantastic deal with Japanese game developer Taito to license Space Invaders. Sales exploded. By year’s end, Atari had grossed over $500 million, the 2600 was now a cultural phenomenon, it had conquered America's living rooms, and with sales hitting over a billion the following year, Atari controlled roughly 80% of this new, booming home video game market and accounted for 65% of Warner Communications’ operating profits.
Then came the home version of Pac-Man. This was 1982, and Atari thought they had the golden ticket. Pac-Man was the biggest arcade phenomenon of the decade—So when Kassar got the rights to Pac-Man, he bet the house on it.
But with their top engineers gone, the game they developed was pretty crap. The graphics flickered nonstop, the sound effects didn’t match the original, and the gameplay was clunky. It felt like a knockoff. Still, it sold. Around 7 million copies, making it the best-selling game on the 2600. But Atari had produced 12 million cartridges that meant 5 million units were stuck in warehouses, and of course their reputation with their customers took a significant hit.
Meanwhile Bushnell channeled all his energies in Chuck E. Cheese’s Pizza Time Theatre and he seemed to strike gold when he found an enthusiastic investor, Robert Brock, a major Holiday Inn franchisee, who signed on to build 285 Chuck E. Cheese’s in 16 states.
But then Brock went to Orlando where he met Aaron Fechter, an inventor who had built a slicker animatronics. The engineering was tighter, the programming sharper. Brock saw it and bailed. He dumped Bushnell, took Fechter’s robots, and launched a rival: ShowBiz Pizza Place.
Bushnell was furious. His own franchisee had become his arch-rival, with better tech and deeper pockets, Bushnell of course sued Brock and in 1982 ShowBiz agreed to pay Pizza Time a portion of its profits for 14 years – a deal valued at about $50 million. But in 1981, before that case was settled, to raise funds and compete with Brock, Bushnell took Chuck E. Cheese public. Both Pizza Time and ShowBiz were now opening dozens of restaurants nationwide, often entering the same markets. “Rapid expansion” became the mantra, sometimes at the expense of operational stability. Stores were opening too fast. Quality control slipped.
By the end of 1981, Pizza Time had well over 100 locations (company-owned and franchised) and annual sales nearing nine figures. ShowBiz Pizza, kept pace. The two companies were thriving on the same arcade boom fueling Atari.
So how was that boom going- well let's get back to Atari- it’s 1982, revenues look good at almost $2 billion dollars, but again as a result of having lost their top engineers, they don’t have any good games in the pipeline - they’re in trouble, so they spend $21 million upfront to secure the rights to ET, an unheard of sum and a deal that Kassar the CEO himself objected to- the deal was done by Warner CEO Steve Ross- Kassar rightly pointed out that ET wasn’t an action story and would be very hard to translate into a game.
Then to ensure that the game was ready for the Christmas market, the developers only had 5 weeks to develop it. So it’s pretty clear that the suits at Warner just didn’t understand anything about the gaming sector, coupled with a total lack of respect for their customers- I read an interview with the lead developer and he said the following: "The bosses believed that as long as we put anything out the door with ET's name on it would sell millions and millions."
The finished game was literally unplayable- millions of copies were left on the shelves- ET the game was a debacle that became the stuff of gaming legend- it’s been called the worst video game of all time.
And so Atari entered 1983 with shelves full of games no one wanted and warehouses stuffed with consoles no one would buy. In September 1983, they sent 14 truckloads of unsold Atari 2600 cartridges and other equipment to a landfill in the New Mexico desert, later labeled the Atari video game burial- and this burial ground forms the central theme of the fantastic documentary on Atari called game Over- well worth watching. They attempted a restructuring effort but it was already too late. By year’s end, losses totaled $536 million.
In just 12 months, Atari went from golden goose to corporate liability and this precipitated a crash in the whole gaming sector, which in turn dragged down the sales of Chuck E. Cheese which was already over-extended as a result of their rapid expansion.
Franchisees revolted and by February 1984, Bushnell was out. Less than two months later, it filed for Chapter 11, reporting a $58 million loss. And in a final twist of the knife, ShowBiz — the company started by Bushnell’s ex-partner Robert Brock — bought Chuck E. Cheese’s out of bankruptcy. The chain has gone through a few different owners over the last few decades, but it continues to this day with over 670 locations worldwide.
As for Atari- it was sold to Jack Tramiel, the founder of Commodore Computer for $240 million in 1984- and the next 10 years for Atari was pretty dramatic- it’s a story I’m definitely going to cover- we’ll probably do an hour long episode on it- but eventually Atari merged with another company in 1996 and that was the end of the brand as we know it, but it’s impact can’t ever be forgotten- it’s been named the second best gaming console ever by IGN magazine and is credited with being the console that the entire gaming industry was built on.
And Bushnell, well I have to give him credit because despite these huge setbacks , the guy just keeps going. Colleagues observed that Bushnell’s creative energy was boundless – “his mind moved at a million miles per hour” – but noted a downside: he couldn’t focus on anything for very long. He had so many side ventures- even while Chuck E. Cheese was expanding he had several other projects on the go, including a venture capital firm that invested in an array of visionary concepts–from interactive TV to online shopping, to door-to-door navigation, concepts that were unfortunately for Bushnell ahead of their time.
One venture he didn’t invest in however was Apple- you see Steve Jobs had actually worked in Atari and Jobs often name-dropped Bushnell as an early mentor.
So when Apple started in 1976 they asked Bushnell to invest $50,000 for a third of the company- he turned them down. And even though in many interviews that I’ve read and listened to, Bushnell talks about how he often lets his ego get in the way, he acknowledges that him not investing in Apple was probably best for the best- and this is a quote from Bushnell: “I actually think if I said yes, the world may have been a slightly different place because Mike Markkula who did the first investment was also a very hands-on mentor and he basically turned Jobs into a naturally acceptable CEO that I probably wouldn't have done”.
After leaving Chuck E. Cheese, he had to close down a lot of his side projects but he set up Axion. A toy-robotics company that made weird, talking bears and motorized pet substitutes- essentially the forefather of Furbies. Hasbro took notice. In 1986 they signed a $3 million deal and eventually Hasbro bought Axion- I couldn’t find out how much for, but for Bushnell it was a modest win, but a win nonetheless.
In 1993, he launched something called Octus which merged voicemail, email, and phones into a single system. What we’d now call unified communications. And while Octus never made headlines, Bushnell kept filing patents and kept getting involved in new companies.
By the late 2000s, Bushnell had firmly re-established his public presence. He became a popular keynote speaker on the topic of education and technology, while also of course retelling his successes and failures. And he was also very open about his regrets, saying: “Selling Atari when I did – I think that’s my biggest regret. And I probably should have gotten back heavily into the games business in the late Eighties.”
Bushnell’s legacy came under fire during the #MeToo era, when a planned Pioneer Award at GDC (the Games Developer Conference) was pulled over past accounts of sexist behavior at Atari—accounts that largely came from Bushnell’s own interviews and biography. Bushnell supported the decision, acknowledged changing workplace norms, and expressed regret. It’s crucial to note: there were no formal accusations or whistleblowers, and several women who worked at Atari have publicly defended him. The environment he described reflected its time—problematic, yes, but Bushnell himself is no predator. Brad Glasgow did a fantastic deep dive into the accusations where he finishes the article with: “There were drugs, there were hot tubs, there were relationships, and none of that would fly today. But none of it indicates a culture that was hostile to women”.
I gotta say, I really like Nolan Bushnell, yeah he’s a bit scattered, he’s got a bit of an ego, or at least he had and while he hasn’t had any big successes since the 1980’s, to me, he’s a true pioneer and the way he lives his life is a success.
You see I actually like the fact that he keeps going off in different directions- that’s what life should be about- following your instincts, going after what interests you- and while they might not always pay off financially, to me that sounds like such a stimulating way to live your life- and he’s still at—for example in 2023 at the age of 80 he became chairman of ExoDexxa, an adaptive learning gaming platform. Here’s a guy who laid the foundation for the gaming industry- he is a pioneer in every sense and this makes for such a great business story.
I hope you’ve enjoyed it as much as I have, and remember if you have any comments, any corrections or any story that you’d like us to cover, email us at: info@gbspod.com
All the best folks