by Tim Peters

Created on: November 23, 2009

When the Atari 7800 was released in 1987, it was supposed to be the home video game console that would give Atari the competitive edge it needed against the Nintendo Entertainment System, which had been released two years earlier. It addressed all the key problems its predecessor, the Atari 5200 had: better controllers, a lower price, better graphics, and even the ability to play games for the Atari 2600. Yet these improvements weren't enough for it to take on the overwhelmingly superior NES. While not a terrible system, Atari needed a great one to be a success and the Atari 7800 simply wasn't good enough.

The biggest reason why the Atari 7800 was not a success was its exceptionally poor marketing. Atari's president at the time, Jack Tramiel, saw the budding computer market as the company's most consistent source of profit. As a result, he focused its attention on its two computers: the Atari XE and Atari ST. By contrast, the Atari 7800 was given a marketing budget of only $300,000. The launch titles were also given low budgets and strict time constraints. As a result, while it did profit initially thanks to its low investment costs, the Atari 7800 was no match for Nintendo.

Nintendo's NES was already a runaway hit by the time the Atari 7800 was released thanks to solid marketing and an excellent library of games, including legendary titles like Mike Tyson's Punch-Out!, The Legend of Zelda, and Super Mario Bros. But its licensing deals were what sealed the 7800's fate. Third-party companies who developed games for Nintendo were barred from making those games on any other consoles until two years after its release. With no games coming from Atari and no strong third-party developers, the Atari 7800 could never build a selection of video games good enough to compete with the NES.

The Atari 7800 lasted until 1992, when Atari abandoned the console as well as the Atari XE. But Atari would only suffer further after the 7800 was scrapped. Despite being technically superior, the Atari Lynx faltered against the Nintendo Game Boy when it was released in 1989 and never became a commercial success. An even bigger failure came when the Atari Jaguar and its infamously cumbersome controller debuted in 1994, only to be completely overtaken by the vastly superior Sony PlayStation in 1995. Looking back, it's clear that while the Atari 7800 wasn't as dismal a failure as some of Atari's other video game systems, it certainly wasn't a success.

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