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Nintendo's Origins
Acquired
The Business Model Behind Atari's Popular Swappable Game Cartridges
The swappable game cartridges for Atari 2600 allowed customers to buy into a long-term gaming experience, with the business model heavily reliant on game sales rather than console margins. This model mirrored the modern gaming era, where consoles are sold at a low price to build an install base, with the real profits coming from game sales. This realization led to the formation of a game-focused company, Activision, by former Atari engineers who understood the business. Atari's initial failure to require deals with third-party developers enabled Activision to enter the market successfully, eventually leading to a legal battle between the two companies.
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