the 1984 cancellation

[tyranthraxus]

Okay so the story goes it was cancelled because Tramiel didn't want to

make game machine but sell computers instead.

 

Now the history section here at AtariAge says it was shelved because the

Tramiels wanted to renegotiate some production contracts which weren't

done until 1986.

 

So which is the real story

[Nukey Shay]

Both are true once you place the first paragraph below the second. Atari wasn't focusing on consoles at that time...if they would have wanted to, they would have straightened out the dispute.

[Lauren Tyler]

Either way, Jack Tramiel blew it big time!

[Curt Vendel]

Okay so the story goes it was cancelled because Tramiel didn't want to

make game machine but sell computers instead.

 

Now the history section here at AtariAge says it was shelved because the

Tramiels wanted to renegotiate some production contracts which weren't

done until 1986.  

 

So which is the real story

 

Resources were VERY limited in 1984 for the Tramiels, they needed to complete development of their new ST computer systems, so this was more a matter of economics... the 8bit line and piles of custom chips were am immediate viable resource to sell, so that line was slightly improved and maintained.... the Atari 2100 (aka 2600jr) was completed and was continued for production. The Atari 7800 was a new product, limited quantities were made and not enough stock was ready to go full force with selling a new line of product, plus licensing fee's and programming fee's for games written for the Atari 7800 to GCC would have to be made, so the 7800 was shelved and put on hold indefinitely... If the NES and SMS hadn't of jumped onto the scene and resparked the videogame market, the Tramiels might now have re-released the 7800 and may have just stuck with the 2600jr line.

 

 

Curt

[DracIsBack]

Either way, Jack Tramiel blew it big time!

 

It's easy to be an armchair CEO when you weren't in the situation.

 

I agree - they made tons of mistakes. On the other hand, I could see why.

 

1. Atari almost collapsed Warner as a result of video games. They were losing $2 million a day.

 

2. Most video game competitors were throwing in the towel

 

3. Resellers like Sears and Robuck wanted Atari's head and were refusing to carry anything Atari-Game related.

 

4. Tramiel had a several hundred million dollar debt to pay to Warner.

 

5. Video games were universally declared dead.

 

In Tramiels eyes, it would have been crazy to deal with another console in 1985 when he was trying to keep the company alive.

[Curt Vendel]

The industry as a whole was moving to computer-gaming, even magazines were changing their names to either have computing added or changed from Video to Computer Gaming... Computers like the C64, Apple //C and ][GS as well as the Atari 800XL and XE's were all very inexpensive (well maybe not the GS) and it appeared at the time video gaming was moving in that direction.... the moment the ST's and Amiga hit the shelves, companies saw them as great gaming platforms...

 

In fact there was a grass roots effort within Atari by Rob Zydbel and several other programmers who actually went out of their way to port games like Star Raiders, Moon Patrol and many other tried and true Atari titles and licenses to the ST with hopes of getting the Tramiels to make the ST technology into a game platform and their efforts almost convinced the Tramiels... There was project "Robin" which was an ST in an XE case that was in the works...

 

 

Curt

[tyranthraxus]

Just how did this figure of losing $1 million+ a day come to be? In 1984

dollars 1 million is a huge number. I can't help but wonder if there was

some creative accounting going on to come up with that. And just how

long were the losses like this?

[DracIsBack]

Interesting note Curt: I've never heard confirmation that Atari was working on an ST-based video game system, though it's often been speculated that this would occur.

 

It's interesting that Atari never actually competed with a 16-bit set top console. Between Robin, the licensing of the Genesis and Panther, nothing ever went forward.

[oesii]

I was reading some Coleco Adam newsletters this week and it was interesting seeing the buzz that the 7800 received in the summer of '84:

 

http://www.sacnews.net/adamcomputer/03.html

 

and it's subsequent snowballing:

 

http://www.sacnews.net/adamcomputer/04.html

 

Always interesting reading first-hand accounts of the era.

[tyranthraxus]

Those newsletters were very interesting, I think I will read some more.

Of note was that even in 1984 the 5200 & IBM;s PC Jr were recieving

slag that continues to this day.

[Justin42]

I was REALLY excited for the 7800 to come out. It got quite a bit of press in that era, and I even cut out the preview from Electronic Games Magazine to make my own little 7800 pre-brochure. (Hey, I was like 9 at the time... I was really looking forward to playing arcade-perfect ports for the first time. I had a 5200 at the time but EG was hinting about an adapter for the 7800 to play 5200 games so I thought it'd be a fairly easy sell for the parents....

 

Then... nothing... for ages.... until they finally announced it just basically wasn't coming out.

 

By the time it DID really come out, I had gotten more into the 8-bit computers and was looking towards getting an ST, and had started moving away from console gaming for a while.

 

Ironically enough, getting a used 7800 in 1996 got me right back into console gaming and classic collecting.

[Classic Pac]

One possible reason for Tramiel actions, is the GREAT VIDEOGAME crash of 1984. I still remember places like Sears could not get rid of them fast enough.

[DracIsBack]

One possible reason for Tramiel actions, is the GREAT VIDEOGAME crash of 1984. I still remember places like Sears could not get rid of them fast enough.

 

Hammer, nail, head ...!

 

While it is easy to pick on the Tramiels, look at it from their perspective.

 

In 1983, Atari endures one of the biggest losses in business history. Atari loses almost a half billion dollars in that year and is losing two million a day.

 

In 1984, a (formerly) three billion dollar industry is raking in less than $100 million.

 

 

Activision is losing. Mattel and Coleco are getting out of the industry. Other 3rd parties are folding.

 

Sears and other accounts have millions upon millions upon millions of dollars worth of unsold games and consoles (mostly Atari, the dominant player) that they can't get rid of. They hate Atari, they hate video games, and are giving that "new" company Nintendo a hard time.

 

Jack Tramiel sees the 7800 and says, "no freakin' way".