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 2018 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. 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. 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. Allan Alcorn, an engineer with whom they had worked at Ampex, was another early hire. 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 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. 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.