What did Atari do
with the ageing 7800 series and it's clever XEGS games system, which was a 65XE redesigned
with an add-on keyboard? Although Atari Corp was primarily a Computer company after
1985, it dipped it's toes into the gaming market a number of times both for revenue and
market share requirements, but most importantly, because Sega and Nintendo were chipping
away at it's forgotten market dominance - and Atari didn't like it
(especially as both companies were now making lot's of money at Atari's
Atari lost much ground to Sega and Nintendo from 1986, it did try and take it back.
The problem perhaps was one of resources, as it was busy manufacturing and marketing home
computers - it took some time for Atari to wake up and realise that consumers were playing
games again after 1984, and so it slowly fought a half-hearted battle against Sega and
Nintendo in the gaming market once more.
Ironically, it was Nintendo who came to the
Tramiels in 1985 looking for Atari to manufacture and market it's own 8-Bit games console,
which Atari quickly dismissed, having no need for a games machine - Atari was a computer
company first and foremost under the Tramiels. While Atari was pushing it's computer
line (for reasons
of survival as well as market share), the great video games crash of 1984
was now part of history, as Nintendo launched it's 8-Bit console in the U.S. market -
simply called the Nintendo Entertainment System (NES), it was an instant success!
In late 1986, after already dusting down
the 2600Jr. from the engineering shelf - Atari looked at inventory of a console called the
7800, which was just canned in the first month when the Tramiels took over at the new
Atari from Warner. With not enough units previously manufactured sitting in a
warehouse, the Tramiels repackaged the 7800 ProSystem, and made as many as they could for Christmas 1986 - they sold out completely, as did stock of the 2600Jr. As good as
this news was, the 7800 was over 3 and a half years old, and the NES and Sega Megadrive
where much more advanced - soon, the 7800 was seen for what it was, an "old"
video game system.
Even the XEGS System, with it's large back
catalogue of 8-Bit game cartridges, and some newly released titles ported from
floppy-disk, such as Star Raiders II, did nothing to stop the sales of SEGA and Nintendo.
Even the addition of a keyboard, allowing the system to be used as a computer wasn't
enough to lift sales - and 8-bit computer technology (selling as the 65XE and 130XE) was
becoming tired beside the new 16-bit computers now on the market.
This seemed like Atari under the
would soon ditch the video games market again, but for unknown reasons, the 2600Jr. (which
was still selling strong, especially in Asia) and the 7800 were continuing to be
manufactured and shipped to dealers world-wide. As for support of these systems, the
2600Jr.'s software support slowed dramatically each year as software houses moved over to
support the new video games systems on the block. The 7800 had a pitiful catalogue
of games released by Atari, sometimes it seemed begrudgingly that Atari actually released
titles for the system at all!
Marketing support was
comparison with Sega and Nintendo for the two ageing games systems, and so it was again,
Atari slowly moved resources to it's cash cow, the ST and TT line of computers.
By 1989, Atari wasn't any threat to Sega or
Nintendo - who had the video games market to themselves. A member of the Tramiel
family, who seemed hell-bent
on "killing Nintendo" (and any other manufacturer
who was a threat!), shocked the games industry at the 1989 CES Show in Chicago. Sam
Tramiel unveiled to the world, a portable video games unit, which was
Even Nintendo sighed a gasp, Atari had launched a real killer video games machine -
called the Lynx!