In 1983 Atari was still losing money in general and it is not really known if the computer division itself was profitable or not. But either way, parent company Warner Communications wanted out. By late spring they were looking for buyers. It just so happened that about that time, Jack Tramiel was starting his own company (Trammel Technologies1) and was looking for a way to jump-start it.

After negotiations in June, Atari and Tramiel came to an agreement on July 1. Essentially Warner loaned Tramiel the money to purchase Atari’s home and computer divisions. Tramiel quickly renamed his Trammel Technologies company to Atari Corp. and took over figuring out how to get things back on track.

There’s a whole story here about the creation of the Atari ST which I’ll leave for another time.

The first thing that the new Atari did was slash prices on the existing Atari 8-bit computers in order to sell off the remaining inventory they got from Atari, Inc. and to raise money to keep the company afloat. The 800XL was soon available for under $150, undercutting the price of the Commodore 64. It sold like gangbusters. This is about when we upgraded to the 800XL.