A Brief History of Atari, Part 3
The End Arrives
Be sure to read A Brief History of Atari, Part 1 and A Brief History of Atari, Part 2 if you haven’t already. They cover the inception of Atari, including the creation of the VCS and 8-bit computers and then the arrival of the Tramiels and the ST computers. Be sure to subscribe so you don’t other great articles like this!
After a fast start with some great new computers, things stagnated for a while as Atari was distracted with other things.
After the initial flurry of ST models, Atari seemed to get side-tracked into other ventures. You have to realize that during the Tramiel era, Atari was never an especially large company. Yet they did allow themselves to get pulled into lots of directions, perhaps looking for the “next big thing” and this also perhaps had a negative impact on the ST.
For example, Atari decided they would start selling low-cost PC clones, the Atari PC1, PC2 and PC3. Looking to cash in on the booming PC clone market, these were never popular and I mostly only sold in Europe. They introduced a bunch of desktop calculators, which just seems weird. They were working on something called Abaq that became the Atari Transputer Workstation which I can’t even fathom.
In 1987/88 Atari bought Federated Group with the idea of using them as a showcase for their products. On the surface this might not had been a bad idea, after all Apple successfully started their own retail business in the early 2000s.
But Atari ended up paying much more than Federated was worth, so much so that they actually sued over the deal. Additionally, Federated stores were focused on the west coast so didn’t really help the US market as a whole. All in all, as Sam Tramiel later said in 1989, “It was an expensive mistake, but it's over“.
The Portfolio was a small, handle PC that was actually pretty cool and probably also pretty popular, but it was just another thing to take Atari’s focus away from their ST computers. It was a neat portable device, but perhaps its greatest claim to fame was used by a young John Connor in the movie Terminator 2 to hack an ATM.
During what many consider the time of the ST, Atari was still getting good revenue from video game sales, particularly the Atari 2600Jr and the Atari 7800. Nothing amazing, but definitely helping the bottom line.
In 1989 Atari acquired a product developed by some former Amiga engineers that were now at Epyx: the Atari Lynx. This was a portable, hand-held, color video game system. It came out about the same time as the Nintendo GameBoy, but was far less popular.
The GameBoy had two advantages: 1) it was much cheaper and 2) it had Tetris.
The GameBoy was introduced at about $80 while the Atari Lynx started at $180. That was a big price difference. The Lynx may have had full-color graphics, but it was much bigger and did not last as long on batteries.
Eventually the Lynx II, a smaller more efficient version, was released but it was too little, too late as by then GameBoy had the portable market locked up. Don’t feel too bad for Atari here, though. No one else has really been able to unseat Nintendo from its portable gaming throne, either.
Because the Lynx was developed by former Amiga engineers, an Amiga was used to create Lynx games which must have annoyed Atari.
The Next Generation ST Computers
With one last hurrah, Atari decided to focus again on its ST line of computers with new models starting to arrive in 1989. Unfortunately these all proved too late to save the Atari computer business.
In 1989 Atari announced the Atari 1040STe, which was a slightly updated 1040ST with a blitter, more advanced joystick ports, SIMM RAM slots, improved audio and not much else. The RAM slots were nice as you could easily upgrade to the maximum 4MB of RAM yourself, but for the most part the 1040STe ran at the same speed as prior ST computers as little new software took advantage of the blitter or other new features.
For years Atari had been working on (and talking about) their 32-bit computer, the Atari TT. When it was eventually released in late 1990 it was a 32Mhz 68030 computer with some newer graphics modes and was actually quite impressive. The case design was particularly snazzy with its off-white “wedding cake” look, detachable keyboard and easy internal hard drive hookup. It was a wide design, but I really liked how it looked on the desk. The price was crazy-high for an Atari product at about $3,000. Unfortunately, people just were not able to spend that kind of cash on the Atari name, a brand that had been working for years to promote low pricing and inexpensive computers.
The TT also ran ST software for the most part but there were compatibility issues due to the new OS and significant architectural changes. Also, it used an internal 16Mhz bus, preventing the CPU from achieving its full potential.
I owned an Atari TT for a hot second in 2005 or so (back when they were dirt-cheap on eBay). I regrettably sold it and now these machines are incredibly rare and expensive.
The Atari Mega STe was released in late 1991 and it was essentially a souped-up Atari 1040STe in the Atari TT case, but in the Atari ST gray color.
The Mega STe also had upgradeable RAM, a place for an internal hard drive and a 16Mhz 68000 CPU. However since the rest of the computer still used a 8Mhz bus, a small cache was utilized (which you could turn off for compatibility). In reality it was more like a 12Mhz ST.
In 1992 I upgraded my 1040STfm to a 1040STe, but after realizing it didn’t offer much new I returned it and instead bought a Mega STe which I used until 1995.
For long-time Atari ST users, this was a great upgrade machine. I wish I still had it.
The last Atari computer was the Falcon030 or just Falcon. This was a 68030 computer running at 16Mhz in a 1040ST-style case. It had a different, unique color scheme and could have an optional internal IDE hard drive, but by 1992 that case design was woefully out of date.
Although announced in 1992, it only hit the US market in 1993 and wasn’t around for long before it was discontinued.
The Falcon had some innovative features, however. It had a programmable video chip with a wide variety of video modes. It had a DSP chip (digital signal processor) and allowed for some impressive audio sampling, new at the time.
Along with the Falcon, Atari also released MultiTOS which was an updated version of their OS with preemptive multitasking. Windows and Mac would not get that until Windows XP and Mac OS X were release in 2001!
I also owned an Atari Falcon briefly in 2005/2006 (picked up on eBay for cheap). I sold it, which I regret to this day.
This final Atari product was the Atari Jaguar 64-bit gaming console. Atari essentially shut down the computer business after 1993 to focus everything on this, but it just didn’t work out.
Referring to this system as 64-bit was a bit of a stretch as it still had a 16-bit 68000 in it, but a couple of the support chips were actually 64-bit: Tom (the GPU) and Jerry (the DSP).
The Jaguar had some really impressive games, including the first-person shooters Doom and Alien vs. Predator. At the time, FPS games were new and no console could really run one well. The Jaguar changed that.
But the pack-in game, Cybermorph, was bad. It was not something that made people want to get the system. The overall rollout of the Jaguar was slow across the US. And games also came out slowly.
The Jaguar was also reportedly difficult to program for. Many developer ended up just coding games to primarily use the 68000 so they didn’t look much different than other 16-bit games from the era, such as the Sega Genesis.
In 1995 Sony released the Playstation and that pretty much killed the Jaguar and Atari.
However, there is one Sony/Atari connection. The PlayStation 2 case design was heavily influenced by an internal Atari design for what they called the “MicroBox” which was going to be an 68040-based Atari Falcon system.
Today the Jaguar hardware is essentially open and you can use JagStudio to create new games for it using a variety of languages.
In 1996, Atari quietly merged with JTS Corporation, makers of hard drives and for all practical purposes disappeared.
The name still is around and in use, but their computer line remains a forgotten footnote. All Atari is really remembered for today are its legacy video games.
What Went Wrong
It’s easy to look back now and guess at what went wrong with Atari, but it was never just one thing. After all, Commodore also disappeared a couple years before Atari. And Apple almost died a few years after, except that they were saved by Steve Jobs and NeXT.
As I mentioned a few times, I think Atari tried to do too many things. As a small company that can be the kiss of death. Sure, many of the things they did were unique and perhaps even innovative, but none of that matters if they could not follow-through on them.
Letting the ST stagnate after its initial release did not help. In many ways, the Tramiels were trying to run Atari the same way they ran Commodore without realizing that the computer business had changed.
As the computer market started to mature, coming out with a bunch of new products to see what “stuck” was no longer viable. People wanted stuff that worked and had software.
I think Atari would have benefitted greatly by disassociating their computer line from the Atari name. A name like Atari ST forced people to use “Atari” to refer to the product. This is often good for marketing (see Apple TV, Apple Watch, et al), but when the name Atari makes people think of Pac-Man and Asteroids, that doesn’t help a computer business.
Commodore was able to do this a bit with the Amiga by giving the computer itself a good standalone name. The same with the Apple Macintosh. Those became know as simply the Amiga and the Mac over time.
Lastly, once the PC market broke out into the home market it was the death knell for home computers such as Atari and Commodore. Most mature markets evolve into two big players and sometimes a few smaller players. Atari was never going to be one of the big players, but perhaps if they had focused on their core strengths they might have stuck it out a bit longer.
Thanks for reading!
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In Germany, where the Atari ST was very popular (much more than the Mac, because Macs in Germany were very expensive, with no special offers to students), there was a huge market for hardware add-ons and software for the ST. For instance, you could buy various 68020 or 68030 CPU boards to install in the ST models (http://www.wrsonline.de/pak3.html). So, no need to buy an expensive TT to get more performance. And then, of course, eventually there was MagiC!Mac, a program for Macs that came with a custom TOS-rewrite, letting you run "clean" Atari ST programs on a Mac, at much higher speeds on the ever-improving 68k and PPC Macs :)
You've mentioned the 2600 & 7800 but what were your thoughts on the XE Game System?
Atari claimed toy stores didn't want home computers anymore so they redesigned the 65XE to be a video game console that "can" become a full fledge computer. I rememebered it only benefited existing 8-bit owners looking for new software, but as a game system it couldn't compete against the NES (or the 7800).