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History

While Atari may have not been the first to develop a video game console meant for the home (Since the Magnavox Odyssey did it first in 1972) nor make one with swappable games sold in the form of cartridges and have a microprocessor (Since the Fairchild Channel F did both things first in 1976). It certainly was the first to truly popularize all those features we now take for granted, and put video games in the home in the radar of many people in the United States.
Initially sought after due to the burdens of developing Arcade video games using TTL (more on that on my Arcade article here) and rendered possible by the rise of inexpensive microprocessors like the MOS 6502 during the mid 70's, development of the console under the codename "Stella" began shortly after and culminated in the release of the Atari VCS in 1977, not before having Atari sold to Warner Communications to achieve the proper funding necessary to finish its development.

The VCS initially retailed for $199 (About a thousand dollars in today's USD.) and had sold around half a million units by the end of 1978, which was pretty good for the time but still not enough to fully turn over a profit for Atari, it wouldn't be until 1980 where they struck a deal with Taito to officially port Space Invaders to the system that sales began to increase exponentially, increasing the total amount of consoles sold to a whopping 10 million by the next two years in the USA. Also presenting moderately decent sales in Europe.
It was also by around 1980 that a group of skilled programmers from Atari, fed up with the poor treatment and payment they were getting despite the success of the games they were making, left the company to form Activision, becoming the first third-party developer and going on to develop several succesful games for the console such as Kaboom! (1981) and Pitfall! (1982), not before getting sued by Atari for distributing games outside of their control due to alleged copyright infringement, though both companies settled out of court and set up a licensing agreement that would officially open the flood gates for several companies to try their hand at the development of Atari 2600 games.

And by flood gates I do mean a shit ton of bastards, by 1980 onward the market was flooded with third-party games of typically dubious quality and competition from companies like Mattel with their Intellivision and Coleco's ColecoVision started putting some considerable competition to Atari's grip of the industry, leading to more aggresive investment in marketing and games (also renaming the console to the Atari 2600 around 1982 to coincide with the release of Atari's 'next gen' console the Atari 5200, which would promptly crash and burn pretty quickly) with licenses such as Pac-Man and Frogger making enough of a splash to keep them afloat.
But soon enough it would all go to shit, as the market began to over-saturate with low quality games, Atari fumbling a sizeable investment in the video game adaptation of 'E.T. - The Extra-Terrestrial' in a game now infamous for its poor reception and an overall confusion flooding the consumers over what to buy or not to that would lead to a decline in the interest towards the market and the money investors were willing to put up, igniting a collosal dumpster fire now known as The Video Game Crash of 1983.

The consequences of this were soon felt in the American market, retailers were pissed off with their surplus that just wouldn't sell and refused to stock on anything video game related, many companies had to shrink considerably to put up with the sudden losses if they didn't just go out of business entirely, Atari themselves practically fell flat on their face and had to be split and sold by Warner in an effort to save their asses and the video game industry as a whole would go on a diving decline for the next few years until the arrival of Nintendo's NES console to reignite the ashes of the market.
During these next few years Atari would enter a sort of 'Zombie' state, as Atari Corporation (Consumer products division of Atari, now in ownership of Jack Tramiel, CEO of Commodore) would rebrand it and market it as a budget console, being kicked around with a few new games from companies like Activision or Atari themselves every now and then until its production would officially end in 1992.
Hardware

The console features a sleek woodgrain design meant to be of a 'Living Room' aesthetic, initially using thick polystyrene plastic in order to give the console a feeling of weight and quality even when internally it was just one board holding everything together, though production was outsourced to Taiwan in 1978, using lighter, thinner plastic with a metal casing.
The front of the console features 6 switches meant for power, TV color settings, difficulty for each player, game select and reset in a left to right order, with the model being revised in 1980 to move the two difficulty switches to the back of the console. It also features two 9-pin console ports (4 in the Atari 2800 revision, that being the only feature that really sets it apart.) which would become an industry standard and be features in many consoles through most of the 80's and 90's. Coming bundled in with a joystick (4 directional joystick with a single fire button) and two paddle controllers (round turnable wheel with a single fire button), a variation of the paddle controller which could spin continuously was also bundled in with the launch game Indy 500.
On the inside of the console itself we have a MOS 6507 powering the system, a cheaper version of the 6502 with reduced capacity for addressing memory, which alongside a cheap cartridge interface reduced the amount of addressable memory to a mere 4 Kilobytes, which I dont think I have to tell you is an extremely low amount of memory for any sort of game. Even though most of Atari's starter games for the console did fit snuggly into 2 or 4KB of data, some expanded this to 8 or even 16KB through the use of bank switching, which basically divides the data into groups (4kb each in this case) and switches them around on the fly when needed.
The graphics themselves are output through a Radio Frecuency connection for means of compatibility with old 70's TVs which had no auxiliary video inputs, thus having an adapter in the console that converts the graphics output to a television signal in a 192x160 resolution in 60hz with 16 colors for NTSC and 228x160 resolution at 50hz with 13 colors for PAL. The sprite limit being 5, with two 8 pixel wide "players", two stretchable "missiles" and a single 1 pixel "ball" with a limitation of only one color per scanline in each sprite due to the lack of a frame buffer that stores the graphics information offscreen for it to be rendered and display onscreen, all graphics are technically rendered on a single scanline where then all backgrounds and sprites can be moved by the program in a way that can be hard to properly sync.

There really aren't any particularly note-worthy revisions of the console other that the nicknamed Atari Jr. released in 1986 by the time Atari was under management of Jack Tramiel, where it was marketed as a 50$ (around 120 buckaroos in today's USD.) budget console and had a presentation similar to the Atari 7800 console.
Software

The Atari VCS released with 9 launch titles; Combat, Air-Sea Battle, Basic Math, Blackjack, Indy 500, Star Ship, Street Racer, Surround and Video Olympics, with Combat specifically coming bundled in within the console's package. All developed and distributed exclusive by Atari themselves, who produced around 38 games between 1977 and 1980 where the third-party licensing agreement was struck with Activision. With almost 400 official Atari 2600 games released by third parties by the end of the console's lifespan.
Out of the top 5 best selling games for the console, only Pitfall! (Activision, 1982) is fully original and not an arcade conversion, the other 4 games in order of most to least sales being Pac-Man (Atari licensed from Namco, 1982), Space Invaders (Atari licensed from Taito, 1980), Donkey Kong (Coleco licensed by Nintendo, 1982, also the best selling third-party game for the system.) and Frogger (Parker Brothers licensed by Konami, 1982)

Most games initially released for the console occupied a measly 2 Kilobytes of data, fully using the available 4KB of data by around 1980 and the first game to double this to 8KB through the use of bank-switching (explained in the hardware bit) would be Atari's own port of Asteroids in 1981. Other later ports like Burgertime (Mattel licensed from Data East, 1982) and Dig Dug (Atari licensed from Namco, 1983) would expand into 16KB which would be the limit for most officially released games for the console with a few exceptions like Sculptured Software's Fatal Run released in 1990 and packing in 32 whole Kilobytes of data (which is still JACKSHIT considering what other consoles at the time where pulling, sometimes with even less.)
Other notable games include Atari's Adventure from 1980, being considered the first Action-Adventure video game (Even though Superman from 1979 technically takes the accolade even though its based on a prototype for Adventure.) and one of the most popular early examples of an Easter Egg and the one that would get the term coined in the first place (though the very first example of one would go back to a game known as Moonlander released in 1973) and Air Raid, developed and published by Men-A-Vision in 1982 with a very peculiar cartridge and such a limited distribution that as of today only about 6 copies of the game have been found and sold off online, making it the rarest and most expensive Atari 2600 game by quite the long shot.

One last note-worthy thing about the games released for the Atari 2600 would be their box art, since the vague and abstract graphics many games features were considered be a hard sell, most cardboard boxes for Atari 2600 games would feature hand painted drawings by commissioned artists (primarily Cliff Spohn, whose artstyle would become the mimmicked standard by every other artist contracted by Atari.) who would create them based on the descriptions they would get of the games on behalf of the programmers. This of course often resulted in pretty majestic results that would juxtapose quite unfavorably towards what the product actually offered in terms of graphics, this becoming one of the focal points of complain by consumers towards the console and its games since its release until this very day.
Favorite Games :D
- Adventure (Atari, 1980)
- Gremlins (Atari, 1984)
- Kaboom! (Activision, 1981)
- Obelix (Atari, 1983)
- Pitfall II: Lost Caverns (Activision, 1984)
- Star Wars: Return of the Jedi: Death Star Battle (Parker Brothers, 1983)
- Superman (Atari, 1979)