Intel had the microprocessor market to itself until 1974 when Motorola came out with the 6800, an 8 bit processor. Afterwards, the leader of the design group, Chuck Peddle, left and took seven other designers with him to MOS Technology, a division of Allen-Bradly (the resistor people). His first product there was the 6501, which was pin-compatible with the 6800 (but not software compatible). The idea was that people who had designed the Motorola 6800 into their product could pull it out and plug in a 6501; they would then have to rewrite their software to use the 6501's improved instruction set.

Motorola took exception to this plan and sued. MOS Technology agreed to stop selling the 6501. Fortunately, they also had the same processor but with a different pin-out. This was the 6502.

When the 6502 came out in 1975 it sold for $25. This was a bargain, since Intel was selling the 8080 for around $150.

U.S. Patent 3,991,307 appears to be for one of the 6502's features. The patent is entitled   INTEGRATED CIRCUIT MICROROCESSOR WITH PARALLEL BINARY ADDER HAVING ON-THE-FLY CORRECTION TO PROVIDE DECIMAL RESULTS. It was isued on Nov. 9, 1976  to Charles Ingerham Peddle, Wilbur L. Mathys, William D. Mensch Jr., and Rodney H. Orgill.
 

MOS Technology was later bought by Commodore.

In 1983, Jack Tramiel, who had taken Commodore from being a small manufacturer of business equipment and turned it into a successful maker of personal computers, left the company and purchased the Consumer Division of Atari Inc. which had gone supernova.

In 1972 Atari Inc invented the video game, selling them to arcades. Games such as Computer Space and Pong were all hardwired.

When Atari decided that microprocessors would make game design easier they approached Motorola about the 6800. Atari was a small company and Motorola was not interested in supporting them, so Atari approached MOS Technology about the 6502. That worked out a lot better, so Atari started using the 6502 in its coin-operated video games.

When Atari decided to develop a game machine for the home, they used a variation of the 6502 called the 6507, which was a 6502 with only 13 of the 16 address lines bonded out. The reduction in address lines and other signals was enough to reduce the package size from 40 pins to 28 pins. This saved money on the package, and 13 address lines would support 8K bytes of memory: 4K bytes for the game cartridge and 4K for the 6532 and the custom video IC. At the time 4K bytes was considered more than enough program memory for any video game.

This game machine was called the VCS (later renamed the 2600) and was more successful than anyone could have imagined when it came out. Because of its use in the VCS, during the 1980s the 6502 was the most used microprocessor in the world.

By the early 1980s, because of the VCS, Atari Inc. was the single largest user of masked ROMs in the world because of its great success in the home video game market that it created. And it used a lot of masked ROMs. And the semiconductor companies made a nice profit from them, which helped pay for all the R&D they were doing that produced all the newer and denser and faster ICs that did so well in the years that followed.

If you have an old Atari VCS stashed away in your closet along with all those expensive cartridges that you made your parents buy, you should know that you helped create the future.