History of video games market in 1978 with the Odyssey, while toy company Mattel released the Intellivision in 1979, which featured graphics superior to any of its competitors. After both Atari and Fairchild made a strong showing in 1977, the market hit a difficult patch in 1978 when retailers resisted building inventory, believing that the newly emerging electronic handheld market would displace video games. Atari, for example, manufactured 800,000 systems, but proved unable to sell more than 500,000 to retail. This helped precipitate a crisis at the company that saw co-founder and chairman Nolan Bushnell and president Joe Keenan forced out by Atari's parent
Nolan Bushnell During this time Bushnell was using large loans on his Pizza Time stock to fund Catalyst. By the end of 1983, Chuck E. Cheese was having serious financial problems. President and long-time friend Joe Keenan resigned that fall. Nolan tried to step back in, blaming the money problems on over-expansion, too much tweaking of the formula and saturation in local markets by the management team. He resigned in February 1984, when the Board of Directors rejected his proposed changes. Chuck E. Cheese's Pizza Time Theaters (now named after its famous mouse mascot) entered bankruptcy in the fall of 1984. ShowBiz