Ted Dabney

Samuel F. Dabney, an electrical engineer who laid the groundwork for the modern video game industry as a co-founder of Atari and helped create the hit console game Pong, died on May 26 at his home in Clearlake, Calif. He was 81.

The cause was esophageal cancer, his wife, Carolyn Dabney, said.

Mr. Dabney, known as Ted, brought arcade video games to the world with Atari, a start-up that he and a partner, Nolan Bushnell, founded in Sunnyvale, Calif., in the early 1970s.

At a time when computers — the main arena then for programmers working to build games — could cost hundreds of thousands of dollars apiece, Mr. Dabney spurned them altogether. Instead he tinkered in a workshop he had set up in his daughter’s bedroom and used plywood and fake mahogany paneling to build Atari’s first consoles.

Mr. Dabney used cheap television components to create an interactive motion system and, in 1971, the world’s first commercial video game, Computer Space.

Although the game was a failure, it was followed the next year by Pong, a simple yet beguiling game in which short vertical lines bat a ricocheting dot back and forth to the sound of beep tones. At its peak, Pong was being played on 35,000 consoles in bars and game rooms across the United States.

“Ted came up with the breakthrough idea that got rid of the computer so you didn’t have to have a computer to make the game work,” Allan Alcorn, one of Atari’s first employees, said in an interview this week. “It created the industry.”

Samuel Frederick Dabney Jr. was born in San Francisco on May 2, 1937. His parents, Irma and Samuel Frederick Dabney, divorced when he was young, and he was raised by his father, an accountant. A brother, Doug, died in 2013.

He attended trade schools and graduated from San Mateo High School before joining the Marine Corps in 1955. He learned engineering at the Navy’s electronics school on Treasure Island in the San Francisco Bay and at its radio relay school in San Diego, according to the video game historian Leonard Herman, who wrote a rare profile of Mr. Dabney in 2009 for the British games magazine Edge.

Mr. Dabney returned to San Francisco after being discharged from the Marines in 1959, and took a job at Bank of America’s research lab. In 1961, he joined the military products team at Ampex, a company in Redwood City, Calif., that specialized in audio technology and data storage and also developed early videotape recorders.

He shared an office at Ampex with Mr. Bushnell, a charismatic engineer who had helped pay his way through college as a carnival barker. Mr. Bushnell was struck by Mr. Dabney’s pure love of engineering.

“He was just all about ‘Let’s get it done,’ ” Mr. Bushnell said in an interview this week. “He was the kindest. He didn’t have an ego.”

The men found inspiration in a computer system they had seen at the Stanford Artificial Intelligence Laboratory. Mr. Bushnell envisioned a game zone with pizza and coin-operated machines; Mr. Dabney had the engineering skills to bring the idea to life.

They left Ampex together in 1971 and started a company called Syzygy. When the name turned out to be taken, they switched to Atari. They hired Cynthia Villanueva, 17, a babysitter for Mr. Bushnell’s children, as the company’s receptionist and first employee. Mr. Alcorn, an engineer with whom they had worked at Ampex, was another early hire.

Their first game was Computer Space, which was based on Spacewar!, a game that Mr. Bushnell had seen running on a PDP1 mainframe computer at the University of Utah. To create it, Mr. Dabney made his breakthrough video circuitry system.

“A computer was too slow to do anything at video speeds anyway,” Mr. Alcorn said. “So once Ted had invented his motion circuit, this trick, you didn’t need the computer anymore.”

Mr. Dabney’s work space was hardly high-tech.

“I kicked my daughter out of her bedroom and set it up there and got all the stuff working, and sure enough, it was working fine,” he said in an 2012 interview with the Computer History Museum.

Thanks to the circuitry he had developed, Computer Space could be housed in a relatively small cabinet that could be slid in next to pinball machines in bars.

“It was an odd beast,” Mr. Alcorn said, “but it fit.”

The cabinet became an industry standard that endures to this day.

“Atari was fundamentally a hardware company,” said Chris Kohler, a video game historian and features editor for Kotaku, a video game news site. “Arcade machines still look like that now, and that was Ted.”

Although Computer Space flopped, Mr. Bushnell had another idea. Having seen a computerized table tennis game, he directed Mr. Alcorn to build something similar using Mr. Dabney’s circuitry. Mr. Alcorn set to work.

“It’s the simplest game ever made,” Mr. Alcorn said. “One moving spot, two score digits, and two paddles. There’s never been a simpler game.”

It was an instant success.

The first Pong console, in Andy Capp’s Tavern in Sunnyvale, quickly broke down. When Mr. Alcorn went to fix it, it did not take him long to determine the problem: It was so full of quarters that no more could fit.

In addition to their professional partnership, the Atari founders were good friends. Mr. Dabney taught Mr. Bushnell to sail, and they bought a 41-foot sailboat together. They called it Pong. But as their company grew, their relationship soured. Mr. Dabney left Atari in 1973, selling his portion to Mr. Bushnell for $250,000.

Mr. Dabney later helped Mr. Bushnell with another venture: a restaurant that combined food, animated entertainment and an arcade. Mr. Dabney’s contribution was a system for alerting patrons when their orders were ready. The restaurant was called Chuck E. Cheese’s Pizza Time Theater.

In addition to Mrs. Dabney, Mr. Dabney is survived by two daughters from his first marriage, to Joan Wahrmund: Pamela Dabney of San Mateo, and Terri Dabney of Paradise, Calif. Mr. Dabney’s marriage to Ms. Wahrmund ended in divorce.

After leaving Atari, Mr. Dabney continued programming, often for the benefit of his wife. He built a recipe program so that she could search for recipes by ingredient and a bank program that allowed her to balance her checkbook just the way she wanted.

In 1995, the Dabneys opened a grocery store and deli called Mountain Market in the tiny mountain town of Crescent Mills, Calif. The shop had movie rentals, a deli, tackle and bait, and rotisserie chicken.

“They almost always had the wood-burning stove burning, with books and chairs for folks to hang out,” Pamela Dabney said. “It was like home.”

Although Mr. Dabney was overshadowed within the video game industry by Mr. Bushnell’s charm and business savvy, his legacy is now being revisited.

“He was the guy that could actually make it work,” said Dustin Hansen, a game developer and the author of a book on video game history called “Game On!” “Where the circuit hits the board, he’s the guy.”