We can stop dementia with games: Atari founder

Gaming and education blend for Atari founder
Gaming and education blend for Atari founder   

The future of gaming could have benefits beyond mere entertainment, a gaming industry pioneer told CNBC Monday.

In fact, it will be possible to stop dementia through the power of games, Atari founder Nolan Bushnell said on "Squawk on the Street."

"The ultimate virtual reality is reality, where you actually go into an environment that is alive and you solve problems, and you put in context the things that you're learning," Bushnell said from technology conference South by Southwest in Austin, Texas.

Today's entertainment sphere is full of powerful, cheap, good-for-your-brain tools — but it's sometimes difficult to get them past the "gatekeepers" in the education industry, said Bushnell, who also founded Chuck E. Cheese's. Bushnell, who now has an education start-up called BrainRush, said he looks forward to the challenge.

"I've been doing this a long time, and I can't tell the difference between my work and my play, which is the real benefit," Bushnell said.

On top of his experience in the entertainment industry, Bushnell is known for his long relationship with Steve Jobs from early in the Apple co-founder's career. Apple's legacy, including its fight with the FBI over encryption of a terrorists' iPhone, has been hot topic at SXSW, where even President Barack Obama weighed in.

Bushnell said Obama is incorrect in his assessment of the real risk when it comes to back doors into encryption. While the government may need to access information on crimes like child pornography, it can't do so by allowing anyone to hack an iPhone, he said.

"I don't want every hacker and identity thief to have access to that back door," Bushnell said.