The Atari 2600.
The Atari 2600. - 
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One of video gaming’s most storied names, Atari, is filing for Chapter 11 bankruptcy today.

Atari is a Silicon Valley legend and it counts the co-founders of Apple, Steve Jobs and Steve Wozniak, as a few of its earliest employees. And it sounds downright primitive today, Atari set off a revolution with its game “Pong," said Michael Pachter is an analyst at WedBush Securities. 

"I remember my dad taking me to a bar -- you know we actually went into a bar, I was under-age," Pachter said. "And we wanted to show me this machine where you could play pong."

That machine was one of the first arcade video games and put Atari on the map. But the company made its real mark in the late '70s with the release of the “video gaming console,” said Patrick Scott Patterson is long-time gamer and an amateur gaming historian.

"People, once upon a time, would use 'Atari' in place of the term video games," Patterson said. "Atari established what video gaming was."

Atari was sold to Warner -- today known as Time Warner -- and for a time, it was one Warner’s main moneymakers. But the competition came quickly, the video gaming industry crashed in the '80s and Atari never regained its perch. Instead, it was sold to a series of companies including Hasbro and its current owner Infogrames. In a press release, Atari said that the bankruptcy filing would allow it make a comeback. 

But longtime industry watchers aren’t buying it. Curt VenDel is the author of "Atari Inc.: Business is Fun."

"They’ve used off all their lifelines, it’s not a happy situation, in reality the time has come," VenDel said. 

Van Dell expects someone will buy the Atari name but says that Xbox and Nintendo’s Wii -- and the industry that Atari gave birth to -- have nothing to worry about.

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