the end of the gaming boom. The "Crash" as it is
called, was mainly caused
by Atari itself - 1984 was the year Atari bombed out of
the Dow Jones for the second time. The computer
division seemed to be getting things right, although
desperate indecision had spread it's resources too thin
and rivals such as Commodore had taken the lead.
Legal disputes with Texas Instruments and software
companies such as Activision and Imagic were distracting
the company and sapping it's energy once more - AtariTel
was still going nowhere (a grandiose Atari networking
plan), prices were too high and other projects were
getting lost in the confusion as direction became blurred.
It was time to
re-group. Staff were cut, whole departments went and
budgets were cut to
the bone, manufacturing was moved to the far east. (Alan Alda didn't
appear in any new TV ads). Atari had wasted an entire year with
the 5200 and 1200XL, in 1984 they were a year behind - a year they
didn't have. Initiatives such as Atarisoft went some way in
picking up the pieces, but at the Consumer Electronics Show in Chicago
that summer of '84, buyers and retailers weren't happy.
decided to put it's stand in hall one, where the likes of IBM hung out - this simple
decision upset Atari's main market, their gamers. At the show the 7800 launched
officially, and as one major buyer said "Just what I need, still another format for
Pac-Man" - No software manufacturers had pledged support for the 7800 system, Atari
were on their own. Even rival Coleco was in trouble, it's computer system
"ADAM" had become an industry joke, and the Coleco-Vision console was nearing
the end of it's life - the only noise at both the Atari and Coleco stands was that of
stockholders biting their nails...
was quietly looking for a buyer to take Atari off their hands - Jack
Tramiel was on his way to see the board of Warner...