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Ray Kassar
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Raymond Edward Kassar (January 2, 1928 – December 10, 2017) was an American business executive who served as president, and later CEO, of Atari Inc. from 1978 to 1983. He had previously been executive vice-president of Burlington Industries, the world's largest textile company at the time, and president of its Burlington House division.

Key Information

Career

[edit]

Ray Kassar began working for Burlington Industries in 1948 and later became the executive vice-president of the company and president of its Burlington House division. A member of the Board of Directors, Kassar spent 26 years at Burlington before he left the company to start his own textile company that manufactured cotton shirts in Egypt and marketed them under the "Kassar" label.[1]

Kassar was hired in February 1978 as president of Atari's consumer division by Warner Communications, who at the time owned Atari. By this time, rifts had begun to develop between the original Atari Inc. staff (most of whom had engineering backgrounds) and the new hires brought in by Warner (who, like Kassar, mostly had business backgrounds).[2]

In November 1978, when Atari Inc. co-founder Nolan Bushnell was fired after a dispute with Warner over the future of Atari Inc., Kassar became CEO. Kassar's experience at Burlington Industries had given him a taste for order, organization, and efficiency, and his efforts to revamp Atari along similar lines provoked substantial animosity. Atari Inc. began to promote games all year around instead of just at the Christmas season. Kassar became derisively known to many at Atari Inc. as the "sock king" and the "towel czar" (due to his previous years in the textile industry) after he once referred to Atari programmers as "high-strung prima donnas" in an interview with the San Jose Mercury News in 1979.[2]

During Kassar's tenure, Atari Inc.'s sales grew from $75 million in 1977 to over $2.2 billion three years later. Though Atari enjoyed some of its greatest success during this period, the stifling atmosphere and lack of royalties or recognition to the individual game designers angered employees, many of whom quit. During this period, nearly all members of the original Atari Inc. staff, including Al Alcorn, quit or were fired. Atari Inc.'s upper management also suffered severe turnover rates. Many blamed Kassar's autocratic management style, but Kassar was not held accountable.[2]

One of the most notable turnovers was when four programmers were unsatisfied with their paychecks. They felt they were making a very paltry salary considering their work designing the games that made Atari millions of dollars. When they asked Kassar for a small commission, David Crane recalls that Kassar responded, "You are no more important to that game than the guy on the assembly line who puts it together." Crane and three others resigned from Atari and formed their own company, Activision, which became the first ever third party developer.

In 1981, the highly popular and successful game Yars' Revenge was released for the Atari 2600. Howard Scott Warshaw, the game's designer, got the names "Yar" and "Razak" by jokingly spelling "Ray Kassar" backwards. Warshaw claimed that the game was "Ray's revenge on Activision".

In 1982, Kassar donated a sum of money to Brown University, his alma mater. In recognition, the university named a university building the "Edward W. Kassar House" after his father. The Kassar House is currently home to the university's mathematics department.

Contrary to popular belief, Kassar was not responsible for the deal to make the E.T. the Extra-Terrestrial game from the blockbuster movie. Steve Ross, CEO of Atari's parent company Warner Communications, was the one who was in talks with Steven Spielberg and Universal Pictures.[3][4] Kassar's response to Ross's query of how he liked the idea of making an E.T. based video game was, "I think it's a dumb idea. We've never really made an action game out of a movie."[4] Ultimately though, the decision was not Kassar's to make and it went through, and it was reported that Atari Inc. had paid US$20–25 million for the rights—an abnormally high figure for video game licensing at the time. The game was not only poorly received and sold poorly, but demand had been widely overestimated.

In July 1983, Kassar was fired due to continuing massive losses at Atari. In December 1982, Kassar had sold 5,000 shares of stock in Warner Communications only 23 minutes before a much lower than expected fourth quarter earnings report would cause Warner stock to drop nearly 40% in value in the following days. The Securities and Exchange Commission accused Kassar and then Atari Inc. vice-president Dennis Groth of trading stock with illegal insider knowledge. Kassar settled, returning his profits without acknowledging guilt or innocence. The shares that Kassar sold actually constituted only a small amount of his total holdings in the company, and the SEC later cleared him of any wrongdoing.[5]

Upon Kassar's resignation, James J. Morgan, formerly of Philip Morris, replaced him as CEO of Atari Inc. in September 1983.

He was a collector and private investor and sat on the Board of the American Hospital of Paris Foundation.

From December 2, 2000 until February 11, 2001, a series of photographs culled from Kassar's significant personal collection were on display at the Santa Barbara Museum of Art. The exhibition, entitled "Painterly Photographs: The Raymond E. Kassar Collection", presented 33 works made for exhibition from 1900 to 1910, featuring some of the most important camera artists of the time, including Alfred Stieglitz, Edward Steichen, Heinrich Kuehn, George Seeley and Clarence H. White. Portions of the collection have been lent on only two other occasions, in 1994 to the J. Paul Getty Museum in Los Angeles and in 2012 to the Neue Galerie New York.

References

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Ray Kassar

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Raymond Edward Kassar (January 2, 1928 – December 10, 2017) was an American business executive renowned for his leadership at Atari, Inc., where he served as president from 1978 and later as CEO until 1983, transforming the company into a dominant force in the burgeoning video game industry. Born in , New York, to immigrant parents of Armenian, Assyrian, and Syrian descent, Kassar was the son of Elizabeth Asfar and Edward Wahid Kassar. He graduated from with an A.B. in 1948 and from with an M.B.A. in 1952, and began his career in the , spending 25 years at , where he rose to executive vice president by 1972, overseeing home fashions and contributing to the company's expansion. Recruited to in February by Warner Communications amid internal turmoil following founder Nolan Bushnell's departure, Kassar initially approached the role with reluctance due to his lack of experience in but was persuaded after discussions with Atari's leadership. Under his tenure, Atari implemented professional management practices, capitalizing on the Atari VCS 2600 console's success; annual sales surged from about $100 million in (with losses) to over $2 billion by 1982, making it the fastest-growing U.S. company at the time and solidifying Atari's position as an industry leader. Kassar's era at was marked by both triumphs and challenges, including aggressive expansion into home computing and licensing deals, but it ended abruptly in July 1983 when he was ousted amid declining sales, inventory issues from rushed projects like the E.T. video game, and broader market saturation. He spent his later years in retirement in , where he passed away on December 10, 2017, at age 89 from Lewy body dementia.

Early life and education

Family background

Raymond Edward Kassar was born on January 2, 1928, in , New York, to immigrant parents Elizabeth Asfar and Edward Wahid Kassar. His family heritage encompassed Armenian, Assyrian, and Syrian descent, reflecting the diverse immigrant communities in early 20th-century New York. As the son of immigrants, Kassar was the first in his family to pursue higher education, marking a significant departure from his parents' experiences. Kassar had one sibling, his brother William Edward Kassar, who later resided in .

Academic career

Raymond Edward Kassar, the first in his family to pursue higher education, attended , where he earned an A.B. in 1948. During his time at Brown, Kassar was influenced by his roommate , whose father, Spencer Love, was the chairman of , a leading textile firm. Following his graduation from , Kassar served one year in the United States , working in . He then enrolled at the Harvard Graduate School of Business Administration. There, he obtained an MBA in 1952, further honing his business acumen.

Textile industry career

Entry into Burlington Industries

Upon graduating from Brown University in 1948, Raymond E. Kassar joined , then the world's largest textile company, as a sales executive trainee at its Burlington Mills division. His entry into the company was facilitated by a personal connection: during his time at Brown, Kassar roomed with , son of Spencer Love, the late chairman of Burlington. Initially assigned to Galey & Lord, a specializing in high-style apparel cotton weaving, Kassar worked in and design capacities, applying his business acumen to capitalize on the burgeoning demand for fabrics in the post-World War II economic expansion. Kassar's early focus remained on apparel fabrics, where he honed skills in and client relations amid the textile industry's recovery and growth in the late 1940s and early 1950s. In 1952, after earning an MBA from , he leveraged this advanced education to enhance his strategic approach to sales strategies within the division. By the mid-1950s, he had transitioned to Burlington's home fashions and apparel fabrics operations. In late 1955, he became sales manager for Burlington's narrow fabrics division, a key unit producing specialized materials. This shift positioned him to build expansive sales networks, connecting manufacturers with retailers during a period of rapid consumer goods expansion driven by postwar prosperity and . Throughout the 1950s, Kassar's rapid ascent from entry-level sales to managerial roles underscored his effectiveness in navigating Burlington's competitive landscape. He advanced to sales manager for narrow fabrics by 1956 and soon assumed presidencies of smaller units like Industrial Fabrics and Ribbon Mills, where he expanded distribution channels and boosted regional . These foundational efforts in sales network development laid the groundwork for Burlington's dominance in home furnishings, contributing to the company's overall revenue growth in the postwar era.

Rise to executive positions

Kassar's career at progressed steadily through and divisional leadership roles, culminating in his promotion to executive vice president in 1972. In this capacity, he oversaw the company's furniture and domestics divisions, in addition to his prior responsibilities for Fabrics, which encompassed nine divisions focused on home fashions. This role positioned him to coordinate a broad portfolio of home products, which had generated $453 million in for fiscal 1970. By the early 1970s, Kassar had already served as president of , the company's most profitable unit specializing in home fashions and fabrics. His 25-year tenure at Burlington, beginning as a sales executive trainee in 1948, was marked by innovative marketing strategies that emphasized high-style, non-imitative designs and the "home fashions" concept, encouraging consumers to refresh their decor every three years. He advocated for the imaginative integration of plastics in furniture and supported modular, knocked-down furniture assembly to expedite delivery and reduce logistical costs. These approaches helped elevate Burlington's position as the world's largest textile company during his time there. In the mid-1970s, Kassar began exploring opportunities beyond Burlington, conducting a survey of Egypt's around 1974 and initiating manufacturing operations there. This included producing long-staple shirts from Egyptian , marketed under his own "Kassar" label. In 1974, after serving on Burlington's , he resigned from the company amid internal changes to fully pursue this independent venture, importing and producing the shirts for the U.S. market, which he continued until joining in 1978. His resignation occurred amid a period of executive upheaval at Burlington, including the departure of several top leaders following earnings challenges.

Atari leadership

Appointment and initial role

In February 1978, Warner Communications recruited Ray Kassar from the to serve as president of Atari's consumer division, valuing his executive experience at for instilling professional management in the fast-growing but disorganized company. Kassar was promoted to in November 1978, shortly after the dismissal of Atari co-founder amid disputes with Warner over the company's direction. In his initial role, Kassar prioritized professionalizing Atari's operations by establishing a formal corporate structure, tackling widespread manufacturing defects—such as high return rates for the console—and redirecting emphasis from arcade games toward the burgeoning home console market to stabilize and scale the . Taking over a company with approximately $75 million in annual revenue but a $15 million operating loss, Kassar shifted focus from engineering improvisation to disciplined marketing and production efficiency.

Growth and key achievements

Under Ray Kassar's leadership as president and CEO of from 1978 to 1983, the company experienced explosive financial growth, with annual revenues surging from $75 million in 1977—prior to his involvement—to over $2 billion by 1982, establishing as the fastest-growing company in the United States at the time. This expansion was fueled by strategic scaling of production and distribution, transforming from a niche arcade manufacturer into a dominant force in the game market, where it captured 70-75% by 1981. Kassar oversaw key product developments that solidified the console's dominance, including expansions to its cartridge library and the release of major hits such as in 1982, which became one of the best-selling original titles for the system due to its innovative gameplay mechanics. He also led Atari's entry into the market with the launch of the Atari 8-bit family, including the Atari 400 and 800 models in 1979, which diversified the company's offerings and contributed to further growth in personal computing. A pivotal aspect of his product strategy was the emphasis on third-party licensing, allowing external developers like —formed by former programmers seeking royalties—to create compatible games, which broadened the 2600's content ecosystem and drove additional sales without overburdening internal resources. Marketing innovations under Kassar played a crucial role in elevating Atari's brand visibility, with robust campaigns that included multimillion-dollar spots featuring slogans like "Don't Watch It, Play It" and endorsements, shifting consumer perception from seasonal toy to essential . These efforts were complemented by expanded retail partnerships with major chains, enabling widespread availability and contributing to record holiday sales, such as the 1981 season where Atari sold millions of units and generated over $500 million in quarterly revenue. Internally, Kassar implemented reforms to professionalize operations, including the establishment of a program in 1978 to reduce defective units and address retailer complaints, alongside reorganizing into distinct profit centers that enhanced accountability and aligned divisions with Warner Communications' broader financial goals. His autocratic yet effective management style, drawing from his background, prioritized efficiency and sales targets, enabling rapid scaling while turning into Warner's most profitable subsidiary by the early 1980s.

Controversies and exit

Employee relations and lawsuits

In May 1979, four prominent Atari programmers—David Crane, Larry Kaplan, Alan Miller, and Bob Whitehead—met with CEO Ray Kassar to demand royalties and better treatment for developers, arguing that their work merited compensation akin to that received by musicians from record labels. These programmers had collectively generated 60 percent of Atari's $100 million in cartridge sales the previous year, yet earned salaries of around $22,000 annually, while Kassar dismissed their contributions by comparing them to assembly line workers and reportedly calling them "towel designers." Kassar's refusal to implement royalties escalated tensions, highlighting his autocratic management style that undervalued the creative staff driving Atari's success. This meeting directly precipitated the founding of Activision in October 1979 by the same four programmers, who left Atari due to inadequate pay, lack of profit-sharing, and minimal recognition for their innovations on titles like Dragster and Outlaw. Activision pioneered the third-party publishing model, emphasizing programmer credits on packaging and instruction manuals—features absent at Atari—as well as royalty structures that allowed developers to share in game revenues. In response, Atari sued Activision in 1980, alleging theft of trade secrets such as proprietary coding techniques for the Atari 2600 console, in an effort to halt the new company's operations. The case was settled out of court in 1982, with Atari conceding defeat on key claims; Activision agreed to pay a modest technology licensing fee but retained the right to produce games for Atari systems, effectively validating the third-party model and spurring industry competition. Kassar's leadership drew widespread criticism for its dismissive attitude toward programmers, exemplified by his 1979 interview remark labeling them "high-strung prima donnas," a quote he later acknowledged as a misstep that damaged morale. This autocratic approach contributed to high employee turnover at Atari, as creative staff chafed under corporate constraints imposed by Warner Communications, leading to rapid exits among key talent and executives. Broader labor grievances, including the absence of credits for game creators and exploitative working conditions, fueled early pushes for unionization in the video game industry during the late 1970s and early 1980s, though Atari's internal efforts remained disorganized and ultimately unsuccessful amid the company's explosive growth.

Financial scandals and resignation

In late 1982, the U.S. Securities and Exchange Commission (SEC) launched a probe into allegations of insider trading against Ray Kassar and other Atari executives following Warner Communications' announcement of disappointing Atari earnings. Kassar had sold 5,000 shares of Warner stock at $52.625 per share on December 8, 1982, approximately 20 minutes before the company disclosed that Atari's fourth-quarter profits would fall short of expectations, causing Warner's stock to drop significantly. The SEC formally charged Kassar and Atari Vice President Dennis Groth with securities fraud in September 1983, alleging they traded on nonpublic information about Atari's weak financial performance. Kassar settled the charges without admitting or denying guilt, agreeing in 1983 to disgorge $81,875 in profits from the stock sale plus interest. The investigation highlighted broader concerns about executive stock transactions amid Atari's mounting troubles, though no criminal charges were filed. Parallel to the SEC scrutiny, Kassar faced criticism for mismanagement that contributed to Atari's dramatic downturn in . Under his leadership, Atari aggressively expanded production to capitalize on the video game boom, resulting in an inventory glut of unsold cartridges as market saturation set in. This overexpansion was exacerbated by the commercial failure of the game, for which Atari manufactured 4 million copies in a rushed deal to meet the 1982 holiday season, but sold only about 1.5 million units due to poor and quality issues—though Kassar was not directly involved in negotiating the licensing agreement. These factors led to Atari posting losses of approximately $536 million in , a stark reversal from its profitability the prior year and contributing to the broader crash. The financial scandals unfolded amid wider turmoil at , including ongoing employee lawsuits over compensation and working conditions that underscored the company's internal disarray. In July 1983, at age 55, Kassar abruptly resigned as Atari's chairman and , citing a desire to pursue other interests, though the move was widely viewed as a forced exit by Warner Communications to stem escalating losses through aggressive cost-cutting. He was immediately replaced by James J. Morgan, a former Philip Morris executive tasked with stabilizing the division. In the immediate aftermath of Kassar's departure, Warner Communications restructured Atari under Morgan's leadership, but the unit continued to hemorrhage money. By July 1984, Warner sold Atari's consumer products division—encompassing home video games and computers—to , founder of , for $240 million in promissory notes, effectively ending Kassar's era and marking a pivotal shift in the company's ownership amid its post-crash recovery efforts.

Later years

Business ventures and investments

Following his resignation from Atari in 1983, Ray Kassar adopted a low public profile and pursued a career as a private investor, focusing on diversified opportunities across multiple sectors while steering clear of the . His investment activities remained largely undisclosed, reflecting a deliberate shift toward personal financial management rather than high-visibility corporate roles. In 2002, Kassar joined the board of directors of the Foundation, a supporting the hospital's medical and charitable initiatives in . He served in various capacities, including as , drawing on his extensive executive network to aid and efforts that enhanced the foundation's philanthropic impact. This role underscored Kassar's transition to advisory and supportive positions in the nonprofit sector, where his contributed to institutional stability without seeking operational leadership. Kassar's post-Atari endeavors were supported in part by the financial resolution of his earlier allegations, in which he agreed to repay approximately $81,875 in profits from Warner Communications stock sales in 1982. This settlement allowed him to maintain financial independence for his private pursuits until his retirement.

Personal interests and death

Kassar was an avid collector of photography, particularly early 20th-century pictorialist works by artists such as , Heinrich Kühn, and . His collection was featured in the exhibition "Painterly Photographs: The Raymond E. Kassar Collection" at the Museum of Art from December 2, 2000, to February 11, 2001, showcasing 33 prints that highlighted the artistic intersections between painting and during the Pictorialist era. Portions of the collection later appeared in high-profile auctions, including "Presents: Photographs" sale in 2025, underscoring its enduring cultural value. In his philanthropic endeavors, Kassar supported initiatives through his collecting and donations, while also contributing to causes. Since 2002, he served as a director on the board of the Foundation, where he held roles including treasurer, aiding efforts to fund medical care and facilities for the hospital serving expatriates and locals in . Additionally, Kassar, along with David Ferguson, established the Raymond E. Kassar Research Fund for Lewy Body Dementia at the , providing resources for research into the that affected him in his final years. Kassar passed away peacefully at his home in , on December 10, 2017, at the age of 89, after a battle with . In his later years, Kassar sought to rehabilitate his public image through interviews, addressing misconceptions from his Atari tenure, such as the myth that he engaged in massive prior to the 1983 industry crash—in reality, he sold only 5,000 Warner Communications shares shortly before disappointing earnings were announced. These discussions, including a 2011 profile, portrayed him as a pragmatic executive navigating rapid growth rather than the villainous figure depicted in gaming lore.

References

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