Why did Atari ditch the 5200?

[atariksi]

The XEGS was doubtlessly an atement to help clear the stock of surpluss 8-bit computer components though, a rather different purpose than the 5200.

 

When I talked with Leonard, he stated the purpose was to undo the travesty of the 5200 and "do it right". It wasn't originally intended as a competitor to the NES, and there was no mention of clearing a surplus stock. Interestingly as well, they intended to keep the idea going and were working on a "Super XEGS" system based off ST technology. Which is what lead to the Panther and then finally the Jaguar.

 

BTW, in one advertisement I have it was selling for $150 for the full setup with light gun and keyboard. According to statements made by Michael Katzin December of '87, they had sold out of all initial stock.

 

What was NES selling for?

[Ransom]

The XEGS was doubtlessly an atement to help clear the stock of surpluss 8-bit computer components though, a rather different purpose than the 5200.

 

When I talked with Leonard, he stated the purpose was to undo the travesty of the 5200 and "do it right". It wasn't originally intended as a competitor to the NES, and there was no mention of clearing a surplus stock. Interestingly as well, they intended to keep the idea going and were working on a "Super XEGS" system based off ST technology. Which is what lead to the Panther and then finally the Jaguar.

 

BTW, in one advertisement I have it was selling for $150 for the full setup with light gun and keyboard. According to statements made by Michael Katzin December of '87, they had sold out of all initial stock.

 

That's not a bad price, given that the NES Action Set was retailing for about that, IIRC. From your research, it would seem that Atari under the Tramiels wasn't as blindly run as people think. Thanks for sharing your findings!

 

I remember seeing the XEGS and 7800 for sale at my local games store at the time (Games Unlimited in 'The Willows' shopping center in Walnut Creek, CA). Unfortunately, I was totally into my Apple //c and (to a lesser extent) my NES at that time. So although today I have both units, they were bought second hand and I have no boxes for them. At least I got the XEGS, complete with gray joystick, power pack, and light gun, at a flea market for $20 in 1991.

Edited December 1, 2009 by Ransom

[kool kitty89]

The XEGS was doubtlessly an atement to help clear the stock of surpluss 8-bit computer components though, a rather different purpose than the 5200.

 

When I talked with Leonard, he stated the purpose was to undo the travesty of the 5200 and "do it right". It wasn't originally intended as a competitor to the NES, and there was no mention of clearing a surplus stock. Interestingly as well, they intended to keep the idea going and were working on a "Super XEGS" system based off ST technology. Which is what lead to the Panther and then finally the Jaguar.

 

OK, sorry for speaking overdefinitively on that. However, I seem to remember a comment from Curt giving me the impression about the leftover 8-bit stock (particularly game cartridges) relation to the XEGS. (I can't seem to find the post, but I think it was something more describing the XEGS as an attempt to increase popularity of the 8-bit line and sell off the stockpiles of 8-bit carts) but maybe it wasn't Curt, I'm not sure.

 

interesting comment about the ST derived game system, Panther, and Jaguar, though I'd immagien the Panther and Jaguar are only related in concept to the ST-based "Super XEGS" as the hardware doesn't share many similarities.(I'd immagine the ST-derived console would have been in development prior to Flare working with Atari)

[atariksi]

The XEGS was doubtlessly an atement to help clear the stock of surpluss 8-bit computer components though, a rather different purpose than the 5200.

 

When I talked with Leonard, he stated the purpose was to undo the travesty of the 5200 and "do it right". It wasn't originally intended as a competitor to the NES, and there was no mention of clearing a surplus stock. Interestingly as well, they intended to keep the idea going and were working on a "Super XEGS" system based off ST technology. Which is what lead to the Panther and then finally the Jaguar.

 

OK, sorry for speaking overdefinitively on that. However, I seem to remember a comment from Curt giving me the impression about the leftover 8-bit stock (particularly game cartridges) relation to the XEGS. (I can't seem to find the post, but I think it was something more describing the XEGS as an attempt to increase popularity of the 8-bit line and sell off the stockpiles of 8-bit carts) but maybe it wasn't Curt, I'm not sure.

 

interesting comment about the ST derived game system, Panther, and Jaguar, though I'd immagien the Panther and Jaguar are only related in concept to the ST-based "Super XEGS" as the hardware doesn't share many similarities.(I'd immagine the ST-derived console would have been in development prior to Flare working with Atari)

 

To me also, seems like ST-based game console is an after-thought. ST was developed avoiding gaming elements-- more of mimicing Mac and business (serious) computing work.

[kool kitty89]

interesting comment about the ST derived game system, Panther, and Jaguar, though I'd immagien the Panther and Jaguar are only related in concept to the ST-based "Super XEGS" as the hardware doesn't share many similarities.(I'd immagine the ST-derived console would have been in development prior to Flare working with Atari)

 

To me also, seems like ST-based game console is an after-thought. ST was developed avoiding gaming elements-- more of mimicing Mac and business (serious) computing work.

 

If it had the blitter and some kind of sound upgrade (like a yamaha FM chip if not STe sound), an ST-derived console might have been OK, even without the blitter it might have been better than the XEGS for late 1987 -or perhaps some time in '88. (the sound would definitley need some type of enhancement over the rundimentary YM2149) Although maybe it would have been beter to just focus on the computers and 2600 Jr+7800 as dedicated consoles.

[atariksi]

interesting comment about the ST derived game system, Panther, and Jaguar, though I'd immagien the Panther and Jaguar are only related in concept to the ST-based "Super XEGS" as the hardware doesn't share many similarities.(I'd immagine the ST-derived console would have been in development prior to Flare working with Atari)

 

To me also, seems like ST-based game console is an after-thought. ST was developed avoiding gaming elements-- more of mimicing Mac and business (serious) computing work.

 

If it had the blitter and some kind of sound upgrade (like a yamaha FM chip if not STe sound), an ST-derived console might have been OK, even without the blitter it might have been better than the XEGS for late 1987 -or perhaps some time in '88. (the sound would definitley need some type of enhancement over the rundimentary YM2149) Although maybe it would have been beter to just focus on the computers and 2600 Jr+7800 as dedicated consoles.

 

Sprites, blitter, various graphics modes with various color depths, sound, etc. all help for games especially during that time with slow processors. 68000 isn't that powerful as resolutions get higher and higher compared to 6502 using a lower resolution.

[DracIsBack]

When I talked with Leonard, he stated the purpose was to undo the travesty of the 5200 and "do it right". It wasn't originally intended as a competitor to the NES, and there was no mention of clearing a surplus stock.

 

Here's a bit more from back in the day on the XEGS strategy

 

-----------------------------

We come again to that perpetual question: is Atari intent on killing the

8-bits?

One way to answer that would be to give you a tour of our warehouse. If you

could see the number of 8-bit computers and software in inventory, you'd

know we are highly motivated to keep the line going.

 

 

Regarding the new XE Game System, which on the first glance is a slap in

the face to those who know how powerful the 8-bitters are -- this system is

purely a strategic move on our part. In order to keep the 8-bit line going,

we must do two things:

 

 

1. Get the computers available in more stores, and

2. Get new software developed for them.

 

 

Software is not being developed by and large because of problem #1. So

which stores do we go to? The mass merchants, who sold the bulk of the

hundreds of thousands (not, unfortunately, millions) of Atari 8-bit

computers out there, are currently retreating from the computer business.

K-Mart carries NO computers. Ditto for Montgomery Wards. And for J.C.

Penney's.

 

 

On the other hand, these same stores are doing a fabulous business in game

systems like Nintendo, Sega, and, of course, Atari.

 

 

The solution, from a business point of view, was to develop a product that

would be appealing to the mass merchants (and also to the public which buys

there), one that also accomplishes the corporate objective of revitalizing

the 8-bit line.

 

 

So what we have with the XE Game System is essentially a 65XE in disguise.

Internally it contains 64K of RAM, the standard OS and BASIC in ROM, two

joystick ports, SIO port, etc. It is completely compatible with the current

8-bit line, including software.

 

 

Physically it is more appealing to those who don't want a computer but who

do want to play games. The main console simply has the 4 console keys from

the XE (Start, Select, Option, and Reset), plus the cartridge port and

connectors. The keyboard is a separate unit which plugs into the console.

 

 

When someone buys the XE Game System, they get the complete package --

console, keyboard, light gun, and 3 programs (including a new version of

Sublogic's Flight Simulator including scenery, all on a single cartridge).

 

 

We expect stores to do a great business in these. We'll make available the

current library of cartridge software, plus we're converting some disk

programs into cartridge format for this system. As time goes by, we expect

to see dramatic increases in sales for 8-bit software -- hopefully, this

will also include practical applications as well as games. This should in

turn encourage developers to create new titles for the 8-bits.

 

 

Once things get moving again in the mass merchants, the current supply of

8-bit computers should also get moving through the dealers -- after all,

they make a better value than the game systems, and take up less space.

 

 

So, those few of you out there who are looking at Atari management as the

evil group who are plotting to quash the 8-bit line, you have it all wrong.

We're trying hard to keep things moving forward. Without the distribution

and the software, no amount of advertising and new hardware development

could work. The XE Game System is our best hope to keep things moving.

--

--->Neil Harris, Director of Marketing Communications, Atari Corporation

UUCP: ...{hoptoad, lll-lcc, pyramid, imagen, sun}!atari!neil

GEnie: NHARRIS/ WELL: neil / BIX: neilharris / Delphi: NEILHARRIS

CIS: 70007,1135 / Atari BBS 408-745-5308 / Usually the OFFICIAL Atari opinion

[Retro Rogue]

 

Here's a bit more from back in the day on the XEGS strategy

 

-----------------------------

We come again to that perpetual question: is Atari intent on killing the

8-bits?

One way to answer that would be to give you a tour of our warehouse. If you

could see the number of 8-bit computers and software in inventory, you'd

know we are highly motivated to keep the line going.

 

That's a bit of a leap of logic though to assume that the XEGS was simply an attempt to "clear warehouse stock". It's clearly stated in relation to another accusation commonly leveled against them - that they had no intent to keep the 8-bit lines going after taking over. They were constantly accused of trying to kill the line during that time period. Likewise, they specifically mention it in conjunction to "the number of 8-bit computers" they have in inventory as well as the software. You're not going to empty out hardware inventory by adding more hardware inventory to it, which is why again the context in the answer is in regards to that question - do they want to kill the 8-bits? But you can hope to spark interest again, which in turn will convince retailers to come back to the table and distribute again, and which in turn will spark more hardware and software development, which is mentioned in the article.

 

Regarding the new XE Game System, which on the first glance is a slap in

the face to those who know how powerful the 8-bitters are -- this system is

purely a strategic move on our part. In order to keep the 8-bit line going,

we must do two things:

 

1. Get the computers available in more stores, and

2. Get new software developed for them.

 

Correct, which falls in line with what I stated. Likewise, you don't release a system to "clear out old inventory" while also stating you want new software developed. They were looking at the XEGS as a way to jump start the entire 8-bit line again. That's also why he states "Once things get moving again in the mass merchants, the current supply of 8-bit computers should also get moving through the dealers." Mass retailers, which had been selling computers a year or two before, were beginning to pull out during that time.

 

They thought they found the method to jump start it in the games industry they were already in with the 2600 Jr. and 7800 as was alluded to by the "On the other hand, these same stores are doing a fabulous business in game systems like Nintendo, Sega, and, of course, Atari." You also have to understand the context here, you're reading an interview with a Director of Marketing and Communications on their marketing and positioning strategy for the entire 8-bit line at the time. That's his context. Besides being a PR guy, he's not someone directly involved in the creation and design of the XEGS. The XEGS, positioned in marketing, was meant to lure the public and retailers back in to the 8-bit computer industry via an initial games console persona as he clearly says. The XEGS, in it's creation and design, was meant as Leonard directly stated in my interview - "the 5200 done right".

Edited December 9, 2009 by wgungfu

[carmel_andrews]

The major problem with the 5200 is that it was essentially a console-ised version of the A8 series, and remembering that sega a few years later tried the same trick with the SMS (which was essentially a console-ised version of their computer series) and that neither system was really that successful in it's home market(s), namely Asia/Japan (SMS) and the US (5200)

 

Perhaps it Atari had gone down the road of developing a totally different console system (like the proposed 10 bit console system they were working on) it might have stood a chance because, It would have been a good system in it's own right and also it would'nt have had the problems like the 5200 did

 

And i don't think that making the 5200 fully A8 compatible would have helped it in anyway, after all look at the XEGS, being totally A8 compatible didn't help it become any more popular

Edited December 10, 2009 by carmel_andrews

[atariksi]

The major problem with the 5200 is that it was essentially a console-ised version of the A8 series, and remembering that sega a few years later tried the same trick with the SMS (which was essentially a console-ised version of their computer series) and that neither system was really that successful in it's home market(s), namely Asia/Japan (SMS) and the US (5200)

 

Perhaps it Atari had gone down the road of developing a totally different console system (like the proposed 10 bit console system they were working on) it might have stood a chance because, It would have been a good system in it's own right and also it would'nt have had the problems like the 5200 did

 

And i don't think that making the 5200 fully A8 compatible would have helped it in anyway, after all look at the XEGS, being totally A8 compatible didn't help it become any more popular

 

But XEGS was after 16-bit era of computing started so 5200 being more compatible with A8 could have helped. But then again it looks like some incompatibilities were purposely put in the 5200.

[Bill Loguidice]

Agreed. The XEGS was already too late to have a consolized Atari 8-bit computer make a difference for either the console or low end computer markets. I will agree with the quote that it was the "5200 done right", though. The 5200 would have benefited from being directly compatible with the 8-bit computers in some capacity, even as a replacement for the 400 (for that matter, it would have benefited immensely from being 2600 compatible out of the box as an alternative, as that was a contemporary knock against the 5200). That's of course assuming that the price could have been reasonable and it would have been technologically practical at the time ('82) to have a separate keyboard.

 

Probably the only company with the manufacturing/supply chain control and efficiencies to put out a practical consolized computer that early would have been Commodore.

 

In retrospect, of course, no hybrids did well, be it the Bally Astrocade, APF IM, Mattel (KC and ECS), Coleco Adam, Creativision, SC-3000, etc., so perhaps it was always meant to be a doomed format regardless of what or when anyone did it.

[Retro Rogue]

The 5200 would have benefited from being directly compatible with the 8-bit computers in some capacity, even as a replacement for the 400 (for that matter, it would have benefited immensely from being 2600 compatible out of the box as an alternative, as that was a contemporary knock against the 5200).

 

The irony is, that's actually what was planned from the beginning according to the documents we have. The original specs were for 8-bit compatibility, and promo material up before the release was also promoting 2600 compatibility.

[carmel_andrews]

The other problem was, was that Atari already had a 'consolelized' computer anyway prior to the 5200, since they marketed the A400 as a 'games system' (kind of like a pre tramiel version XEGS but with a built in keyboard)

 

So no one really had an idea what market the 5200 was aimed at, no one at atari that is, since the 400 was aimed at the games market, a 400 without a keyboard wasn't going to do any better

 

Perhaps if they'd not handicapped the system, i.e a different cart size and limited memory, and stuck in some sort of 2600 on a chip type of thing, 5200 might have succeeded

 

After all, how many 7800's would have sold if Atari had stripped out the 2600 mode

[Curt Vendel]

That was the point of the ST - to be a serious computer. The Atari 800 was a very sophisticate and serious system in 1979 when it came out, look at what it was going against - it was leaps and bounds ahead of everything in sound, graphics, user friendliness.

 

Warner pushed it more as a game system and that is what hampered and hurt it.

 

 

Curt

 

 

 

To me also, seems like ST-based game console is an after-thought. ST was developed avoiding gaming elements-- more of mimicing Mac and business (serious) computing work.

[Bill Loguidice]

The other problem was, was that Atari already had a 'consolelized' computer anyway prior to the 5200, since they marketed the A400 as a 'games system' (kind of like a pre tramiel version XEGS but with a built in keyboard)

 

So no one really had an idea what market the 5200 was aimed at, no one at atari that is, since the 400 was aimed at the games market, a 400 without a keyboard wasn't going to do any better

 

I don't really agree with that. While arguably the most useful aspect of the 400 was as a games machine because of the frustrating keyboard, it was NEVER mentioned in the same breath as the Atari 2600, Intellivision, Odyssey2, et al., nor sold in the same manner (though there was big box store overlap for all low end computers and consoles in those days). The price was also a bit too high in comparison to the consoles.

 

After all, how many 7800's would have sold if Atari had stripped out the 2600 mode

 

Now see, to me that's an interesting question. If the 7800 was released in 1984 like it was supposed to be, then having the 2600 compatibility was completely logical because that's what the perception was that people were looking for and a nice bullet-point. However, with the system not seeing wide release until a few years later and with consumer expectations changed by that point, ironically the backwards compatibility probably did more harm for the 7800 commercially than it did good. This was particularly true in light of rather misleading game cartridge packaging indicating "works on the 7800" and the like for 2600 games. Atari would have been far better offer just pushing the 7800 as the 7800 and downplaying the compatibility aspects of the thing, as well as forbidding dual branding on the 2600 game boxes. Again, this is because of the market in 1986, not because of what was a very sound decision for 1984.

[Bill Loguidice]

That was the point of the ST - to be a serious computer. The Atari 800 was a very sophisticate and serious system in 1979 when it came out, look at what it was going against - it was leaps and bounds ahead of everything in sound, graphics, user friendliness.

 

Warner pushed it more as a game system and that is what hampered and hurt it.

 

Curt

 

Is that really what hurt it, though? Could it have ever really made an impact in the business world as designed? (even the 800 didn't have a truly professional keyboard, there was no easy way to get 80 columns, etc. The Apple II was much better suited to these tasks outside of the CP/M and later IBM PC systems, even with the higher pricing for all of those systems versus Atari's product) The other issue of course was Atari's perception as a games company. Their success in the arcade and particularly with the 2600 (1980 on) really would have limited their options in the "stuffy" business world (perception), even with the best possible business machine. Atari should have taken a page from their early history (or that of the car makers) and make a separate brand, with Atari being the low end and "xyz company" being their high end line of products if they had serious intentions for the business computing market.

 

The realty is, it was the best games-capable computer from 1979 until the release of the C-64 in 1982, so there's no reason it shouldn't have leveraged that strength during that time. On the low end, people really weren't buying computers in droves to do much from a productivity standpoint, as the costs were still prohibitive and the results weren't necessarily business-friendly (or accepted).

 

I think the Commodore 64 showed just what type of an impact a games-centric computer could have. The major problem for Atari and all of Commodore's competitors was always one of price. If Atari could have aggressively dropped the price every year after release, they might have built the momentum necessary to carry them through the 80s in a stronger position than they were and been able to challenge the C-64 (which always had the supply chain advantage). To my knowledge of the numbers, the Atari 400 and 800 never had strong showings, with systems from Tandy and Texas Instruments (the 4a) maintaining sales prominence until the C-64 picked up momentum. There were lots of factors around Atari's failure to gain momentum with the 400/800 - including price - but I certainly disagree that lack of entree' into the business world was one of them. On the flip-side, I would agree that they could have pulled an Apple and made a strong push for the education sector, which might have helped things along and helped with the platform's "longevity" (and I'm not saying it didn't have a good run - it did and there's no disputing that. The late 1970's to the late 1980's is nothing to scoff at, but it never was a major market force like it could have been (which I think we also all agree), and certainly it was a "failure" in other markets (again, partially due to price), which again didn't help matters).

Edited December 11, 2009 by Bill_Loguidice

[Retro Rogue]

I don't really agree with that. While arguably the most useful aspect of the 400 was as a games machine because of the frustrating keyboard, it was NEVER mentioned in the same breath as the Atari 2600, Intellivision, Odyssey2, et al., nor sold in the same manner (though there was big box store overlap for all low end computers and consoles in those days). The price was also a bit too high in comparison to the consoles.

 

Carmel is actually half right, it was pushed as the lower end game computer to the 800's higher end "serious" computer.

 

Atari would have been far better offer just pushing the 7800 as the 7800 and downplaying the compatibility aspects of the thing

 

Well I know a lot of the marketing under Tramiel did actually push the 7800 for the 7800 and mentioned the 2600 compatibility as only a small side mention -

 

http://gaygamer.net/images/atari7800.jpg

http://www.youtube.com/watch?v=XaPm1XK6BGg

[carmel_andrews]

Perhps they should have gone with the original 2600 upgrade idea (which i understand came about as they were designing the A8 computers or the hardware) namely the a800 as is and a games system like thing (with A8 hardware) with 2600 compatibility, i guess problem would be though, getting it onto the market at a pricepoint similar to the CV or inty (and that wasn't Atari/warner's strongest suit)

 

Interesting that sears decided againsd doing a badged version of the 5200, prefering to wait till the prosystem/7800 came along

 

Perhpas instead of trying to sue GCC over speed up kits for certain coin op games, the two should have sat down and worked on designing a better 5200 (i.e. a taster or the 7800 perhaps, like a 7800 jnr.)

[atariksi]

Perhps they should have gone with the original 2600 upgrade idea (which i understand came about as they were designing the A8 computers or the hardware) namely the a800 as is and a games system like thing (with A8 hardware) with 2600 compatibility, i guess problem would be though, getting it onto the market at a pricepoint similar to the CV or inty (and that wasn't Atari/warner's strongest suit)

 

Interesting that sears decided againsd doing a badged version of the 5200, prefering to wait till the prosystem/7800 came along

 

Perhpas instead of trying to sue GCC over speed up kits for certain coin op games, the two should have sat down and worked on designing a better 5200 (i.e. a taster or the 7800 perhaps, like a 7800 jnr.)

 

It's interesting though that 5200/A8 were Atari R&D products yet they didn't support A2600 whereas the 7800 was mostly not Atari R&D but was compatible with A2600. Or did Atari R&D add A2600 compatibility to 7800? I guess even Coleco added A2600 compatibility although they definitely weren't Atari.

[zylon]

I'll own a 5200 again soon, mostly for 5 or 6 games I really liked on it. Around the time I got into Atari and gaming in general, our local store advised against buying a 5200 and recommended either 2600 or 7800 because of customer complaints so we ended up with a 2600 jr.

Were I in charge of this system, I'd have pushed for new games instead of S.O.S.

Edited January 14, 2010 by zylon

[Lynxpro]

A) He got back in to the computer market after about a month and a half of a vacation because he felt nobody else on the market had what it took to compete against the Japanese. It had nothing to do with "quashing Commodore", that just would have been a bonus. He's stated this in plenty of interviews, and Leonard told me such as well. Jack always had a fear of Japanese competition, going back to Commodore's calculator days. b) He intended on using Atari's back stock of game systems that he inherited from the get go and would have gone with releasing the 7800 at that time ('84-'85) as well. The issue (from their viewpoint) was on again and off again negotiations (i.e. price and cut) regarding the 7800 that finally cleared up by '86.

 

 

This is why Tramiel is psychologically fascinating. He's not a natural-born American citizen, yet he seems to believe his companies are the champions of Americana and thus they must stand up to the Japanese competition. Yet Tramiel's Commodore destroyed two American industries - home video games and home computers -in his personal quest to smite Texas Instruments. His own actions caused the collapse of computer - and computer components - manufacturing in the US. After all, Atari Inc. moved their manufacturing overseas mainly because of Tramiel's Commodore.

 

Of course, Microsoft [who touts itself as a great American company anytime the Feds try to take action against them] is also to blame. MSX was their baby and had it been popular in the US and Europe, Microsoft would've gained control of the entire industry much quicker than it ultimately did...

 

 

 

Kassar was gone long before, it was Morgan who stopped production of the consoles.

 

 

Does Kasser do interviews yet? Any gag order agreement he had with the SEC must've expired by now...

 

 

 

From the outside it def seemed like the Sam heart attack was the finale - He was the only Tramiel left that wanted to keep moving forward and it almost did him in!

 

 

Famous Rick James quote popping into my head...

 

 

 

This is all true, but it wasn't just a decision based on choice, you forget to mention the video game crash of 1984 which was the reason the entire industry crumbled, all except for Atari, which barely survived only becuase it was the Juggernuat of the era. But, even Time Warner, who owned it, thought the era of the video game console was over, and why they sold it to Jack in the first place. And Jack, coming from a computer only company, thought the future was also in computers, and not consoles. If not for the video game crash, the 5200 would not have been dropped, and the 7800 would have been released as scheduled, and Atari over the next dozen years...well, the sky was the limit. Jack wouldn't have owned it and Time Warner would have retained Atari. The Commodore Amiga, would have been the Atari "Amiga" game console as the next gen after the 7800, and possibly also still Atari's flagship in it's computer division too. The current console market, and possibly even the PC market, would be a very different looking place today.

 

 

No. Warner Communications sold Atari to take pressure off its stock, not because they allegedly thought video games were dead. At the time, Rupert Murdoch had launched a hostile takeover of Warner partly because Warner's share price was being dragged down by Atari's losses. Philips had approached Warner to buy 100% of Atari and Steve Ross told them "no". Ross knew the video game collapse was temporary and he was determined to hold onto a piece of Atari and buy it all back when it was revived and the threat from Murdoch was over. This is why Ross rejected the Philips offer - which probably would've been in cash - for the stupid promissory notes he got from Tramiel; not to mention Warner got a 25% stake in Tramiel Atari. Warner then paid off Murdoch to drop the takeover attempt and Murdoch then acquired 20th Century Fox instead, mainly because one of their executives that had a large stake in the company fled the country for tax evasion and Murdoch bought the defaulted shares cheaply.

 

Warner's stock rebounded and they were back again acquiring other companies such as Lorimar Telepictures. Then Ross set up the Time-Warner merger. Ross re-acquired the Atari Games Corp. and got the two companies to work together again on their antitrust lawsuits against Nintendo. There is no doubt Ross wanted to repurchase Atari Corp. because he had always been the champion of the concept of a "multimedia" corporation long before the rest of Hollywood got on board. Unfortunately, Ross died of prostate cancer before much of his plans could be enacted.

 

If you look at Warner, they rarely give up on industries they compete in. If their stock price is jeopardized, then they sell off their businesses but retain a minority stake and usually compel their partners to sell it back to them at a later date and at a favorable price to them. When digital downloads hurt the music biz a few years ago, Time Warner sold 75% of Warner Music to Edgar Bronfman to take pressure off their stock [almost exactly like what happened to Atari]. At some point, they will reacquire Warner Music. Their handling of AOL also reminds one of their ownership of Atari. Infighting between Time Warner Cable - now a separate company - and AOL doomed that merger. But it would not surprise me if Warner does reacquire some of the pieces of AOL in the future if Google doesn't pick them up first.

 

As for the Atari Games Corp., it no longer exists but its IP does and Time Warner owns it again. Back in 96, they sold Atari Games Corp. to Williams/Midway/WMS Industries for $56 million. Midway went bankrupt in 2009 and Time Warner snapped up all of that IP - including all the other Williams and Midway IP too - for $30 million. All of it is now part of "Warner Bros. Interactive". And as I've said in other threads, I totally expect Time Warner to (re) acquire "Atari Interactive" at some point in the next two years. If they can successfully make motion pictures from the IP, it would totally be worth buying the company [think Disney buying Marvel Comics]. I also expect Time Warner to drop the "Time" part of their name and revert back to Warner Communications since that's the portion that controls the company anyway...

 

I know I would prefer to see all of Atari's IP in the hands of Warner again instead of the present owners, or the Tramiels, or anyone else. I am surprised the Tramiels haven't bought the rights to "Commodore" since it would probably be cheap since it belongs to a small European firm at the moment.

 

 

 

Quote,Now, why would Atari risk angering its customers by abandoning the 5200 after just less than 1 1/2 years.

For the same reason they angered Atari fans by putting existing inferior crappy sound hardware in the 7800,that and numerous other things as well. Atari,judging from the stuff they did,didnt care much about the customers.They cared about saving money and making a profit,no matter what that took to achieve,even though they often failed at that too.It was such a greedy cash grab back then,everyone jumping on the bandwagon to get a piece of the profit pie.And really,who F@#$kin cares what the beancounters say,do you enjoy the 5200?thats all that counts.Maybe it was a faliure financially to Atari,but it was a winner to me,the customer,IMO.

 

 

Just a point of comparison. Warner Atari and Tramiel Atari ripped off their customers much less than say, Apple. Granted, because Apple ripped off their customers so much, they had enough money to last all the way to this day as essentially the very same entity [many might argue that Apple became a different company after the NeXT acquisition that brought Steve Jobs back].

 

 

 

The sound on the 7800 was a byproduct of customer listening and also cost-cutting. Remember, people were up in arms that the 5200 couldn't play 2600 games. So, "compatibility with the 2600" was a primary design goal of the 7800. To achieve that though, they needed to include 2600 hardware in the system. As a result of the added cost of this, they chinced on casing and having a POKEY or other chip drive the sound in order to offset having the 2600 hardware.

Also - if they were all about cost cutting, they wouldn't have been losing $2 million a day. At that point, cost cutting was about necessity.

 

 

Since it didn't come out until 1986 anyway, can you imagine what the 7800 would've been capable of had the Tramiels upgrade the design to adding 16k/32k/48k/64k to it in addition to either a POKEY or AMY chip? Stereo would've been nice. Heck, a lot of that could've been possible with the unused expansion slot.

 

 

Maybe the press made up the self-centering problems.

But I do think the normal Atari 800 joystick is the best and Atari was better off leaving the controllers as they were with the standard A800 joystick and A2600 paddles. They already had the keyboard controllers if they needed the extra keys for level setting, player setting, and start/pause/etc. The keyboard controller is sturdier than the A5200 keypad.

 

 

Maybe Atari should've just brought out a 16 direction digital joystick.

 

 

I wish I could go back in time, kill Kassar and give the new management a few hints about the future, but I can't.

 

They should make a Star Trek episode about that, someone uses the Guardian of Forever to go back in time and kill Kassar, then history is changed and the Enterprise is suddenly full of Atari arcade machines... Spock kills Kirk when he decides to use the Guardian to fix things, considering the captain’s behavior most illogical...

Or Terminator: in the future Nintendo took control of the world. Mankind then sends a hero back in time to kill Kassar and make sure Atari destroy Nintendo before it becomes too powerful. Nintendo then sends their latest creation back in time, "Wii love Kassar", to protect the man...

In fact if we take the multiple universes theory seriously, then there should be a universe where Kassar died when he was still a kid and Atari eventually took control of the world, just like Microsoft in our own universe (Blade Runner probably took place in that universe. In 2019 they had those Atari neon things…)

 

 

You have to go back further than that. You have to go back to early 1976 and convince Nolan Bushnell to seek alternative funding methods and/or contain Warner's investment to below 50% of the stock and then get Nolan to spend money acquiring MOS and give Steve Jobs $50k to start Apple in exchange for an equity stake. Atari ends up owning MOS - which prevents Commodore from ever going anywhere - and then gets a nice licensing agreement with Apple on future tech and then makes some cash when the Apple IPO happens. As a fan of the "Foundation" book series, its hard not to see Atari - complete with the splitting of the company - as "The Foundation" and Jack Tramiel as "The Mule" with his company serving as his temporary "Empire".

 

But I agree with you, we live in the sucky universe/time line. I'd rather be typing this on a modern day Atari laptop.

 

 

but those got shellved durring the restructuring by Morgan after the crash (shortly before being sold to TTL and becoming Atari Corp).

No, Morgan's shelving and freezing of projects was during the Fall of '83. What I had stated in the previous thread was some didn't make it past that and some did up until the freeze. Other's were casualties of Warner management.

Morgan seems to have been more focused on getting Atari's Video game buisness back together (along with the general reform th ecompany sorly needed), putting computers on the back burner.

Not in the least. He just reorganized the corporate structure and streamlined the product lines across the board. He was not against computers, and in fact intended to try and make them more successful for Atari:

"Morgan was surprised, then agitated, to discover that many of Atari's senior executives who were working to develop and sell personal computers had no use for them in their own homes"

"Says Morgan, who is determined to make home machines more useful: "Seventy-five percent of these sets are being bought for home entertainment or by parents who are made to feel guilty about not further enhancing their children's computer skills."" Time, Feb 6 1984

(I seem to recall him creating a spinoff company to move some of the computer stuf over to, don't remember much right now though)

No, you're thinking of NATCO which he started up reorganization towards in May of '84. Under that, everything else would be spun off except for the development, production, and sale of video games and computers. He wanted to present a streamlined management from the bottom up to cut a lot of the overbloaded bureaucracy with competing departments and resources (such as what happened with the 5200). Unlike what Eduardo mentioned, a common complaint among analysts at the time is that the computers and video games were actually seperate divisions instead of one. I.E. the separations were actually seen as a detriment.

He was also very interested in increasing Atari's game development and creativity, with thoughts in line to what some of the people here expressed regarding Atari relying on the same old games:

"Americans are mazed out and shot out. They're tired of video games. Atari must compete against movies, novels, TV, anything that makes up America's six hours a day of leisure time. It is criminal in my mind that Atari did not think of a game like Trivial Pursuit first. I don't believe the industry will be a hit again until it rekindles its imaginative resources. If not, it's bye-bye to the industry." Morgan in Time, Feb 6 1984

He had a complete disdain for Kassar and his management style, and felt that was the chief reason for Atari's problems, the overbloatedness -

"Says Morgan: "The way Atari did business is dramatically opposed to the values I live by and believe in. There was an incredible arrogance at Atari. It was a rigid, unchallenged and unchecked giant, and it has paid every penalty imaginable for its mistakes."" Time, Feb 6 1984

Morgan never got a chance to do any of this stuff. Warner already started working to sell off Atari that January and had gone through 5 propsectives before Jack, completely behind Morgan's back and undermining him.

And I don't know how practical designs liek Sierra or Gaza would have been as home or buisness computers. (at least some of the designs seem to have been rather high-end workstation type developments)

They were moving to produce a high end line specifically for business.

 

 

I wish Morgan would've been given more time to implement his reorg. I believe he could've pulled Atari around and it would've been a fantastic success again. Better to remember him for that than what ultimately happened with his testimony to Congress about tobacco products... Morgan would've probably been what John Sculley pretended to be.

 

 

Not sure on the exact details, but I've seen figures in the $20+ million range for the ET licence.

That was kept private, haven't run across it yet. But as far as I recall they spend a good $75 mil on advertising alone.

Ok, found it. Steve Ross at Warner made the deal with Spielberg and royally screwed Atari, once again showing the problem with dual management that went on during that time period. Atari originally approached MCA themselves and offered $1 million and were shown the door. Ross then did it himself over the weekend in East Hampton, meeting with Spielberg and neogtiating the deal. Happened in July, it was for a guaranteed $23 million royalty to MCA/Spielberg, and Spielberg demanded it had to be out that Christmas.

Apparently the reason 4 million were produced was because that's how many they needed to sell to make a profit after the royalty, production, and advertising. According to Kassar, unfortunately of the 4 million sent out, 3.5 million were returned

 

 

It was part of his ploy to lure Steven Spielberg to Warner Bros. Pictures and away from his loyalty to Lew Wasserman at MCA/Universal. The strategy did work partially; Spielberg agreed to make half his films at WB Pictures thereafter. Ross also had Warner pay for Spielberg's moving costs to a new home. It is all in the Steve Ross bio that came out in the mid-90s.

 

I didn't think E.T. was as bad as Raiders of the Lost Ark was. I never could beat that game... that whole parachute thingie was nearly impossible to do.

[kool kitty89]

This is why Tramiel is psychologically fascinating. He's not a natural-born American citizen, yet he seems to believe his companies are the champions of Americana and thus they must stand up to the Japanese competition. Yet Tramiel's Commodore destroyed two American industries - home video games and home computers -in his personal quest to smite Texas Instruments. His own actions caused the collapse of computer - and computer components - manufacturing in the US. After all, Atari Inc. moved their manufacturing overseas mainly because of Tramiel's Commodore.

What I find more ironic is that, while Japanese computers never ended up encroaching on the market as Tramiel feared, Japanese companies ended up owning the video game console market. Ironic in the sense that Jack wasn't especially interested, or a t least concerned about the electronic entertainment market so much, but that he ended up buying Atari at that. (and have the Japanese dominance of video games arrive only a couple years later)

 

That and the C64's position in the market (contributing to the severity of the video game crash, while not actually inducing it) helped set up the market for Nintendo to come in and Sweep up. (with no heavy direct competition -at least not with competent marketing -Sega seems to handle things rather poorly)

 

 

I didn't think E.T. was as bad as Raiders of the Lost Ark was. I never could beat that game... that whole parachute thingie was nearly impossible to do.

I know some do like Raiders though. (from what I've seen, I think I'd probably have prefered ET's more straightforeward gameplay -both require instructions to properly play though)

I think ET Phone Home on th e8-bit computers may have been a good bit better.

[Retro Rogue]

Does Kasser do interviews yet? Any gag order agreement he had with the SEC must've expired by now...

 

He's very hard to get to, I think I've seen maybe one post Atari interview, and that was for the Steve Ross book.

 

You have to go back further than that. You have to go back to early 1976 and convince Nolan Bushnell to seek alternative funding methods and/or contain Warner's investment to below 50% of the stock and then get Nolan to spend money acquiring MOS and give Steve Jobs $50k to start Apple in exchange for an equity stake.

 

Wouldn't have saved anything and actually would have been worse off. Nolan already had the company close to bankruptcy several times since 1972. They had even had layoffs already as well. The company was out of start-up mode and needed corporate leadership other than Nolan.

 

Atari ends up owning MOS - which prevents Commodore from ever going anywhere

 

No way. There was never any deal to acquire MOS and there was no need to with the open licensing for the 6502 that was allowed. And even entertaining such a thing, if that would have happened with MOS then there never would have been any deal with Synertek and you'd have no Jay Miner. Which means the 2600 would have been much later and the 400/800 much different and much later as well.

 

And that's the wrong time frame for the potential Apple deal, that was before they were looking at the investors. According to Woz they approached Al and them in '75 when they were gearing up for PONG and the Apple I was still in development:

 

"We went down to visit some Atari friends. We went to Al Alcorn's house, and he had a projection TV—the first time I ever saw a projection TV in my life really. And we put it on his projection TV and he looked at it and he liked what we were doing. He was real interested. Atari would do this, but they had a hot project coming out—the first home Pong game—and they were going to have so many millions of those that every effort in their company had to go that way. They didn't have the ability to do two things at once. So they turned us down, very friendly though. "

 

Then that April '76 was the full showing at Homebrew and they were in production by July. Interestingly, they had also approached Commodore about producing them but were also turned down because Peddle and Tramiel didn't think color could be manufactured cheap enough at the time.

 

I wish Morgan would've been given more time to implement his reorg. I believe he could've pulled Atari around and it would've been a fantastic success again. Better to remember him for that than what ultimately happened with his testimony to Congress about tobacco products... Morgan would've probably been what John Sculley pretended to be.

 

In complete agreement. I think what he had in mind was just what they would have needed, and it involved direct employee investment in the company which would have brought it back down from the overinflated management style that was rampant. A lean Atari would have been something to reckon with.

[Lynxpro]

He's very hard to get to, I think I've seen maybe one post Atari interview, and that was for the Steve Ross book.

 

 

I could swear I've seen his webpage before of his art collection [not that has anything to do with this].

 

 

Wouldn't have saved anything and actually would have been worse off. Nolan already had the company close to bankruptcy several times since 1972. They had even had layoffs already as well. The company was out of start-up mode and needed corporate leadership other than Nolan.

 

 

True, but what management team would've been right to fully take over yet leave Nolan around as a happy advisor?

 

One thing you aren't mentioning - which may not be factual, I dunno - was Nolan's stunts including buying up as much memory on the market to prevent competitors from getting ahold of it. According to him, and I've seen it repeated elsewhere on the net, Warner put a stop to that.

 

 

No way. There was never any deal to acquire MOS and there was no need to with the open licensing for the 6502 that was allowed. And even entertaining such a thing, if that would have happened with MOS then there never would have been any deal with Synertek and you'd have no Jay Miner. Which means the 2600 would have been much later and the 400/800 much different and much later as well.

 

 

Why are those mutually exclusive? I brought it up because Al Alcorn mentioned that at the Commodore anniversary panel [that he had suggested before that Atari acquire MOS prior to Commodore]. It just seems like if one deprived Commodore of MOS, then Jack Tramiel never could've enacted the massive price cuts that damaged Atari and the rest of the industry. The only other way Tramiel could've still enacted such cuts would be if he had been successful at buy Zilog and then made all future Commodore computers based on the Z80. Of course, the time line is murky because Warner bought Atari in September 1976 and Commodore acquired MOS in October 1976 [or vice versa].

 

Even with the open licensing, Warner Atari didn't buy a fab plant which was ridiculous. Had they had fab production - and/or memory - the Commodore price cuts could've been matched.

 

 

And that's the wrong time frame for the potential Apple deal, that was before they were looking at the investors. According to Woz they approached Al and them in '75 when they were gearing up for PONG and the Apple I was still in development:

 

Do you think Jobs & Woz would've turned down a later investment in their biz later in 1976?

 

 

Then that April '76 was the full showing at Homebrew and they were in production by July. Interestingly, they had also approached Commodore about producing them but were also turned down because Peddle and Tramiel didn't think color could be manufactured cheap enough at the time.

 

 

Thank goodness Tramiel didn't get his hands on Apple. At least there's one unofficial spin-off from Atari that still exists.

 

 

In complete agreement. I think what he had in mind was just what they would have needed, and it involved direct employee investment in the company which would have brought it back down from the overinflated management style that was rampant. A lean Atari would have been something to reckon with.

 

 

As long as they kept the engineers and programmers...and the marketing team.

[Keatah]

I passed on the 5200 because there was no backwards compatibility with the 2600.

 

The best computer or game system that maintained compatibility from its original system would be the IBM PC.

 

 

here here!! I consider emulator software so important that I treat them like part of the os. Yes, with dosbox and stella and whatever else emulators my pc is *THE* most backward compatible and capable machine of all time!

yessirree babycakes!!