During the early days of home consoles, Atari absolutely dominated the market, with its popular Atari 2600 VCS and a slew of games. Five years after the 2600’s release, Atari tried to mirror that success with its next-generation console, the 5200. Unfortunately, a number of factors, not the least of which was a lack of backward compatibility with its massive Atari 2600 library, doomed its success. But, just two years later, they appeared poised to erase the failures of the past with their latest console, the Atari 7800. So, why did it ultimately fail?
Atari 7800 Console
Let’s get one thing straight from the start: the 7800 was not a bad piece of kit. The console had strong hardware capabilities, with impressive sprite handling, excellent potential for arcade conversions, and, most importantly, compatibility with the massive existing library of 2600 titles people already had in their collections. The console had a number of popular arcade conversions lined up for release, including ports of Pac-Man, Dig Dug, and Pole Position II. Had it been released in 1984, as originally planned, it would have been one of the strongest consoles on the market.
Unfortunately, the console had several factors working against it. It’s hard to ignore one of the major dominoes in the chain of events leading to the console’s downfall: the deadly release delay. The console was initially developed during 1983-1984 as Atari’s answer to the post-crash console market. Atari had a massive rollout planned for the 1984 Christmas season, with a lineup of 14 cartridges, a high-score cartridge that would have allowed users to save high scores from one session to the next, and even a keyboard peripheral. Unfortunately, the parent company, Warner, had decided to sell Atari’s computer and console divisions to Commodore founder Jack Tramiel. Tramiel, in turn, canceled the ’84 rollout of the 7800.
Pole Position II for the Atari 7800
Unfortunately, the system was held up by the Warner-Tramiel transition and a dispute over who ultimately owed money for the console and games. When Atari eventually did release the console, it was two years later, in the summer of 1986. The 7800 was released with Pole Position II as a pack-in game, and it did moderately well. Unfortunately, Nintendo had spent the last year establishing a foothold in the US with the NES, and there was no chance for Atari to regain the momentum it had lost in the two-year release delay.
The 7800’s launch library would have been impressive if it had been released in 1984. But with Nintendo dominating the home market with titles like Super Mario Bros., Excitebike, and Kung-Fu, arcade conversions of games like Ms. Pac-Man and Robotron: 2084 looked dated. Titles on the horizon, like Xevious and Galaga, while impressive home conversions, simply weren’t enough to draw gamers away from Nintendo’s steamroller of a system.
Even though the Atari 7800’s hardware was advanced, it did have some notable deficiencies. It’s MARIA graphics chip was very capable at moving objects across the screen, which gave it a leg up on arcade conversions. And, of course, the aforementioned 2600 backward compatibility was a big selling point. But the system used the same sound chip from the 2600. While it did support cartridges with more advanced sound hardware, such as the POKEY chip, these cartridges would be more expensive and the exception rather than the rule. This left games sounding much more primitive than those being released on the NES. And while the Pro controller was not as divisive as the one released with the 5200, it was still no match for the NES control pad, which would become the controller standard, so much so that Atari would eventually release the similarly designed CX-78 control pad for their system.
Xevious for the Atari 7800
Unfortunately, Nintendo had locked up the market that Atari needed a share of to succeed. Nintendo also didn’t have to deal with the baggage from the pre-video-game crash that Atari carried around. After the crash, retailers were not anxious to stock their shelves with brands that would remind consumers about this disastrous time. With no home console presence prior to the crash, Nintendo managed to avoid this, and retailers felt more comfortable with Nintendo product stock than Atari’s. By 1987, Nintendo, Sega, and Atari were all in the home market, but Nintendo was the one most closely associated with the home console renaissance in consumers’ eyes. Atari wasn’t simply competing with Nintendo as a company; it was competing against its own image, and it was losing.
While Nintendo and Sega were able to establish themselves with clear identities, with characters like Nintendo’s Mario and Sega’s stellar home arcade conversions to the Master System and, later, the Genesis, Atari simply wasn’t able to break away from the idea that they were simply more Atari. They could have gained a foothold in the market as a budget alternative to the more expensive competition, but instead, they were content to try to convince consumers that “Atari was back.” Sadly, it couldn’t have been further from the truth. Atari retired the 7800 after the 1991 Christmas season, along with the 2600 and the XE computer line, with just around 12% of the gaming market.
While Atari would continue into the 90s, it wouldn’t be able to reclaim the dominance it enjoyed during the 2600’s heyday. And, by the summer of 1996, Atari ceased to exist as an independent video game company. Fortunately, the resurgence in popularity of retro gaming and computing has given Atari a new lease on life, but it’s hard not to consider what might have been had the 7800 been released before the NES. Unfortunately, we’ll never know.
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