Be sure to read A Brief History of Atari, Part 1 if you haven’t already. It covers the inception of Atari, including the creation of the VCS and 8-bit computers. Be sure to subscribe so you don’t miss the final installment of A Brief History of Atari next week!

1984

Shortly after CES in January of 1984, Commodore CEO Jack Tramiel abruptly quit due to a dispute with its chairman of the board. This was quite a shakeup in the industry as Commodore was riding high at this time on sales of its incredibly popular Commodore 64 8-bit home computer.

After taking a few months off, Jack decided that retirement wasn’t for him and formed a company called Trammel Technology Limited (the incorrect spelling was intentional in order to get people to pronounce Tramiel correctly).

He slowly started siphoning off Commodore employees for his new venture, one of which was Shiraz Shivji, a highly regarded hardware engineer.

At this point, probably around May or so, there were some informal designs for a 16-bit computer being planned. Sometime during this period, Warner Communications also started making it known that they were looking to dump its Atari division, which was losing lots of money and dragging down the entire company. Soon Jack began negotiations for Atari.

Tramiel Purchases Atari

In July 1984 negotiations were complete and Atari, Inc. was “purchased” by Trammel Technology Limited, which then renamed itself to Atari Corp. I put purchased in quotes there because Warner essentially lent Tramiel the money to buy Atari in the form of stock retention and a note to be repaid later. Tramiel spent very little cash on the Atari acquisition.

Most of Atari’s staff was fired as the company was cut to the bone in order to stay afloat. More former Commodore employees started flowing over to Atari.

Amiga Contract

Around this time, Commodore snatched up Amiga (then its own company with money troubles) in order to get a hold of a 68000-based computer of its own. Later in the summer Leonard Tramiel at Atari came across a check that indicated the old Atari might have some rights to Amiga after lending them a significant amount of money. This allowed Atari to file a lawsuit against Commodore regarding Amiga which might be why they didn’t talk about the Amiga publicly until the next year.

Atari Becomes Commodore, Commodore Becomes Atari?

At the time this was quite a shakeup and is still rather amazing when you think about it today. The Amiga had been in development for years, primarily by Jay Miner and his team. As you read in part 1, Jay Miner was the primary creator of the Atari VCS (2600) and the Atari 8-bit computers. He left Atari shortly after the 8-bit computers were released and eventually ended up working at Amiga to design a next-generation video game system that became the Amiga computer.

So you have the “father” of the Atari 8-bit computers creating the Amiga, which ends up being a Commodore product.

And Jack Tramiel, the “father” of Commodore, leaves that company to buy and run Atari.

It was and is bananas!

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Atari ST Arrives

During the second half of 1984, work on what would become the Atari ST was underway. At this point it was known it would be a 68000-based GUI computer, like the Apple Macintosh, and use mostly off-the-shelf parts so that it could be built quickly and cheaply.

There was a question of the operating system, though. Apple had spent years designing and building MacOS. Atari didn’t have that kind of time so they looked for external operating systems they could adapt.

Microsoft Windows was briefly considered, but Microsoft did not have a 68000-compatible version and could not provide one in the time frame Atari needed.

Digital Research (DRI), makers of CP/M had a new windowing system they were working on called Crystal. Crystal became GEM and it was ported to the Atari ST in the fall of 1984 by the Monterey Group, a combination of Atari and DRI engineers. This was done concurrently while GEM was also being developed for x86!

Amazingly at the Consumer Electronics Show in January 1985, Atari was able to show actual working prototypes of the Atari ST: a 130ST with 128K RAM and the 520ST with 512K RAM. They went from design to working prototype in just over 6 months, an amazing achievement!

Like most home computers of that era the ST consisted of the computer itself which was also the keyboard. The disk drive and display were separate. Atari originally announced separate pricing for these but when they eventually were put on sale, only the 520ST was produced and it was sold in a bundle with a disk drive and your choice of color or monochrome monitor.

The 130ST was cancelled because Atari quickly realized that 128K just wasn’t enough RAM, especially when they had to load the first versions of the OS from disk into RAM — the OS was about 200K itself!

To get the OS up and running quickly Atari was originally using DRI’s CP/M 68K, a 68000-compatible version of CP/M that they already had. But CP/M was old and clunky. It didn’t even have support for file system folders (or course neither did the original Mac file system).

However, DRI was working on something called GEMDOS a more modern OS that was quite similar to the MS-DOS API. Shortly after CES Atari made the decision to drop CP/M 68K and switch to GEMDOS, but this required more porting and development work and probably did end up delaying the ST a couple more months, although that is just me reading the tea leaves.

In late spring of 1985, Atari started sending out custom-built development systems for those that signed up and were willing to pay about $4,000, obviously quite a premium, but apparently the actual cost since they were custom-built. For some, this early market lead would be worth it.

This package included a full 520ST, drives, both displays, a C compiler system and a large collection of not entirely integrated documentation. In fact, much of the docs referred to CP/M 68K which confused many early reviewers who didn’t realize they actually had GEMDOS at that point.

In June 1985, the first Atari 520ST computers started shipping to dealers for purchase by the public. A system with the computer, a single-sided disk drive and a monochrome monitor sold for $799 ($1974 in 2022), an amazing value at the time, especially when you consider the Macintosh was about twice that (for less RAM).

So essentially Atari went from concept to shipping product in a about a year, which remains an amazing achievement to this day!

The next month (July), Commodore announced the Amiga and got all the press and magazine covers which might otherwise have gone to the ST. A clever move in retrospect as the Amiga didn’t actually ship until later in the Fall (October, I believe). The Amiga was priced at around $1800 for the computer and an RGB monitor.

Atari XE

In that 2nd half of 1984 Atari was surviving by selling the inventor of XL computers it inherited as part of the purchase. At that time 800XLs were sold at amazingly low prices, often below that of the C64. This money allowed Atari to stay afloat as it was designing and developing the ST.

To help keep the 8-bit line feel fresh as it would continue to be a source of revenue it was redesigned into the Atari XE series, which would have a case design similar to the Atari ST. There would now be two models, the 65XE which essentially replaced the 800XL and was to sell for only $99. And the 130XE which was essentially and Atari 800XL with 128K of RAM. It would sell for $149.

These computers started shipping in spring 1985 ahead of the Atari ST.

They also announced a wide variety of XE-themed peripherals, but not all of them actually made it to market. There was a dot-matrix printer, a cassette drive (in Europe), 300 baud and 1200 baud modems and eventually a replacement 360K disk drive.

Once the Atari 520ST system started dropping in price, the Atari 8-bits stopped being a great value. By 1987 you could get an Atari 520ST monochrome system for $600 and use your TV for color. If you bought a 130XE ($150), disk drive ($200) and monitor ($200), at $550 you were pretty close in price to the much more powerful ST.

The 1040ST

In early 1986 Atari announced the 1040ST with 1MB a RAM for $999. This was such a milestone that Byte magazine featured it on their March 1986 cover.

The 1040ST eventually became the best-selling of all the Atari ST computers. It combined the computer, keyboard, disk drive and power supply into one (rather heavy) unit, which was much nicer than the sprawling mess of wires you would have with a 520ST system.

I purchased an Atari 1040STfm in December 1988.

If you look for Atari STs on eBay today you primarily find the 1040ST. I have re-acquired two Atari 1040STs, one from an antique shop in New Hampshire and one (via eBay) that I picked up from a fellow in Cape Code, MA.

The Mega ST

In 1987, perhaps when Atari was hitting their stride, they announced the Mega ST computers. These computers came with 2MB or 4MB or RAM and had a blitter chip (similar to the Amiga) for much faster graphics manipulations. The Mega STs also had a detached keyboard, a “pizza-box” case that you could set the monitor on, a built-in battery-backed clock and an internal expansion port. These were intended to be the business STs and were designed to work in conjunction with the Atari laster printer that was low-cost because it made use of the RAM in the computers (normally laser printers had their own RAM, greatly increasing the price).

Unfortunately, there was a dynamic RAM shortage in the US around this time which greatly affected the supply of Atari ST computers here and also kept the prices higher than Atari would have liked. This was the beginning of the US market starting to dwindle.

The European market would continue to be strong for years to come, however.

In 1989 Atari started showing something called the STacy a portable ST. This took a while to ship and was essentially a 1040ST with a monochrome LCD, built-in floppy and optional built-in hard drive. It took a while to ship, but it did become relatively popular with music professionals.

The Finale (Part 3) Next Week

The next (and final) installment of A Brief History of Atari will cover the next generation computers and the end of Atari. Be sure to subscribe so you don’t miss it!

Read A Brief History of Atari, part 3.