The company later made the leap to a household name with its Model 2600 game system and beloved titles such as Asteroids and Centipede.
The bulky, black and brown 2600 was the first multi-game system to attach to a user's TV and bring the arcade experience into everyday living rooms.
Vintage 2600 machines, complete with fist-grip joysticks sporting red thumb buttons, sell on eBay for upwards of $100, compared with their $79 retail price two decades ago.
"It makes me sad," Bushnell told the Daily News. "You get a strong parental feeling toward things you create. And it's distressing when they fall to earth under somebody else."
Bushnell sold Atari to Warner (now AOL Time Warner) in 1976. The company later splintered, with the arcade business going to Midway and many consumer titles eventually landing at French gaming giant Infogrames.
Infogrames has re-released some nostalgia titles in formats to match contemporary consoles. But now, there'll be no new games from Atari's creators.
Viacom chairman Sumner Redstone owns about 25% of Chicago-based Midway, according to Hoover's research service.