Founders Nolan Bushnell and Ted Dabney originally wanted to name Atari "Syzygy," only to learn that the name was already taken by a roofing company. Consequently, the pair decided to brainstorm new ideas while playing a round of Go, which Bushnell was experienced in; an issue of Atari's home computer magazine I/O stated that "Their best brainstorming always occurred over a good game and a bottle of beer."

Following this, Bushnell and Dabney decided to name the company after a piece of Go jargon, settling on "Atari," a term used to describe a playing piece that is surrounded on all but one side. "Sente" and "Hane" were also considered as possible names.