Atari's enormous success inevitably led to its very own downfall. As the company was now corporately run, the programmers became dissatisfied with their treatment. Atari had gone from a casual and fun workplace under Bushnell's management, to a stuffy, corporate gig with little acknowledgment or reward of a job well done, a structure the video game publishing industry still suffers from today. Soon the programmers that helped build the Atari's empire started to leave and form their own companies to publish games for the 2600.
As the idea of a console with interchangeable games was still a new concept, and the previous generation of video game systems all cloning off one another, the copyright, patent and trademark laws weren’t set up to protect first party console manufacturers as they are today. Soon the market was flooded with games, all designed for the 2600 and many made by former Atari programmers who jumped ship. These third-party publishers were able to work around the rights issues by never using the Atari logo, adding a disclaimer that they were not related to Atari Inc. and only acknowledging that the cartridge was designed for the "Atari Video Game System".
Soon Atari began suffering from the same woes that brought on the demise of Pong. Not with look-alike games, but with an overwhelming number of companies rushing to get a piece of that 2600 gold, with a tidal wave of unofficial games. Many of these games were low in content and quality. Even Atari's self-published titles began to suffer due to rushed production cycles and most of their top programmers having already resigned.
Although many site the release of the ill fated E.T. game for the 2600 as the beginning of Atari's downfall, and the oncoming of the Video Game Industry Crash of 1983, it was more of an accumulation - too many games, too low of quality and very little technology growth in homes and arcades. Warner sold-off Atari in 1984 to Commodore Business Machines who immediately closed the game publishing wing.
In 1986, Commodore released a redesigned version of the 2600 as a budget title with the marketing tag line "The Fun Is Back!". The system sold moderately well but eventually came to an end in 1990. To this day the Atari 2600 remains the longest selling home video game console ever and many of its more popular titles are seeing re-releases for next-gen gaming consoles and handhelds, and pre-programmed plug-in-play units as retro collections.