PART 2 HERE
Ever since I was little, I was fascinated about the "if only"s surrounding the demises of these companies. I've dug into the surrounding circumstances a ton, and I thought I'd share my conclusions on how these companies could escape their circumstances (no such luck for Intellivision or Colecovision, sorry). I'll do these by the order of their divergence from our timeline. But first, a history lesson. (If you're here from the Amiga tags... you'll have a ways to scroll.)
The so-called "video game crash of 1983" was brought about largely by issues Atari was having with their 2600 platform, on which third party companies had absolutely no obstacles to marketing millions of copies of their own low-quality games, even as Colecovision and Intellivision (and the royalties for the patent on the design of the Atari's one unique chip wouldn't come until later) introduced peripherals that made their consoles 2600-compatible, making moving away from it a high priority for the company in 1982; as well as price dumping from the Commodore VIC-20 and Commodore 64 computers, intended to drown out Texas Instruments and their computer after having acquired a manufacturer of chips just as TI previously drowned out Commodore calculators that relied on their chips; for the sake of comparison, when the Atari 5200 launched, it was $269, and the Atari 400 computer with identical hardware and many of the same games was $249 with a $55 mail-in rebate, prices it had to hit to compete with Commodore. Looking back, it's hard to believe this product hit store shelves at all, let alone sold a million units (probably more towards later, into some price cuts), especially when you could even play most of its games on the 2600; but it's certainly much easier to see why the Colecovision, using a stack of off-the-shelf components the same as those used by platforms such as the MSX computer standard, Spectravideo computers, and Sega's debuting SG-1000 console, which was directly inspired by it, and coming in at a cheaper price packed in with Donkey Kong against the 5200's- get this- Super Breakout, outsold the 5200 by more than 2 to 1.
Atari quickly figured out it had made a mistake, and within a year of the 5200's launch in late 1983, it was working with the subcontractor porting most of its games, GCC, on developing a proper successor to the 2600, with a prototype named the 3600. This product, renamed the Atari 7800, launched in test markets in California for $140, two months before being pulled by its new owner and CEO, Jack Tramiel, to re-assess Atari's strategy going forward, during which time it surfaced that GCC had never actually been paid for their work. From what I can tell, Tramiel probably had little interest in relaunching it at all, but after legal conflicts concluded that as the inheritor of all of Atari's assets, he had to pay GCC for their work, he decided to recoup the losses by releasing the 7800 at $80 as the big brother to their new 2600 Jr at $50, which outsold it about 7:1. These undercut the NES and Sega's $200 price significantly, and the 7800's hardware was up to the task of competing on a technical level (save for its poor sound, which resulted from Atari's non-payment of development, which would have gone towards something better for the full release of the console), but the games for it were simple in gameplay and presentation; despite being the founder of Commodore, Tramiel and the original business class at Atari (those that weren't let go of during the acquisition) seem to have had pretty compatible mentalities in terms of cheaply outsourcing as much software development as possible, and it was reflected in the library. The 7800's games even at their best are fine, but meager, and there were very few. Somehow, in 6-8 years, the 7800 got 59 games; in less than 2 years, the 5200 got 69 games! All these circumstances led to the 7800 underselling even the Master System in North America, which was being terribly mismanaged by its North American distributor, Tonka.
Additionally: the Commodore Amiga was originally being developed by a private company, for Atari. When Amiga caught wind of Atari's incoming acquisition by Jack Tramiel, they remembered their encounter with him a few months before in which he said he wanted their hardware design, but not to employ them. So when Commodore came to them with the offer to bail them out of a debt they owed Atari and a deadline by which if they did not pay it their designs would belong to Atari, they were quick to agree. Knowing that he had seen the Amiga, one wonders if Jack Tramiel modeled some of the Atari ST ("Jackintosh")'s features after it.
Unlike any of Atari's clowns, Hiroshi Yamauchi, CEO of Nintendo, was not just cutthroat, but sharp to match it. In mid 1983, leading up to the Japanese release of the Famicom, Nintendo saw Atari's total failure to compete with the Colecovision prominently featuring their game and made them a hardball deal- that they become the global distributor of their console. This deal almost went through, under Atari CEO Ray Kassar, with it easy to infer that he planned to sit on the exclusive agreement to trap Nintendo in Japan and ordered the 3600 made instead. But Yamauchi dodged this bullet when Ray Kassar was booted, and the deal was scuttled. Instead, an updated model of the 2600 platform was released in Japan as the Atari 2800 shortly after the Famicom and SG-1000's joint launch, and flopped badly, mainly owed to its price tag- 24,800 yen to 15,000 yen- worse hardware, and arguably, worse games. I have to conclude this price tag came from logistical issues I don't know about, because Epoch's version, which launched in 1979 before being cancelled in favor of their Cassette Vision, came in at a whopping 56,300 yen. So Japanese penetration was a complete no-go.
Here's some images of what that could have looked like, provided by Midjourney:
Much later, under Tramiel in 1988, Atari was approached by Sega, seeking a new distributor for their hardware outside of Japan. The deal fell apart because Tramiel would not provide favorable terms, but it got far along enough that the Genesis got its name from someone in Atari.
Given these facts, what are some other things Atari could have done, and where would they have ended up?
What would have saved them is an earlier release of the Atari 7800 (Atari 3600) instead of the 5200, or even not releasing either. The 3600 did not have cutting edge technology, as demonstrated by its low and competitive price point when it launched in test markets in our timeline. If Atari had commissioned the 3600's design earlier, after rejecting the 5200, it could have been on the market in time to compete with the inferior Colecovision for Christmas, or early the year after at the same price point. Coleco may have maneuvered itself into exclusive rights to Donkey Kong, but Atari acquired the rights to its sequel, Mario Bros., and could eventually market Mario Bros. as the new hotness for Christmas of 1983. With Mario Bros., better graphics than the Commodore 64 and the Colecovision, and a competitive price of $150, same as the Colecovision and $80/50 under the Commodore 64 if you didn't have a computer or console to trade in and $20/50 over it if you did, the 3600 could find its way against Commodore on strong software just as the NES did. It's also easy to see consumers trading in a 2600 to go towards a Commodore and buying a 3600 for their existing game library, an investment of the equivalent of about $700 modern dollars, which is not too dissimilar from what modern console buyers spend.
However, Atari would have to dramatically- unrealistically- step up its software development to compete with Nintendo and its horde of Japanese partners. Before 1989, Nintendo's only Western partners were Rare, LJN, and Tengen, a division of Atari Games, which was the arcade half of Atari after their OTL bankruptcy split, and there weren't really strong, large Commodore 64 game companies that Atari could poach either. The most obvious route to having a viable console was to penetrate Japan, but this was not viable for them either as discussed above. It's possible that Atari, with more cash flow, better management, and more interest, could have partially risen to the challenge internally, but it's hard to see how this keeps them anything but firmly stuck in third place, and with no licensing money from third parties. Atari stayed in game hardware for so long because, under the Tramiels, they saw themselves as a hardware company that also sold software to move hardware, but under previous management, there was more of a balance. Their exit strategy was to become a third party software vendor, and software was prioritized over hardware or market control or platform management; you can see this in Atari not expecting third parties to exist for the 2600 at all, and choosing to take Coleco's and especially Mattel's offer of royalties for a 2600 adapter for their console instead of just blocking it.
But whether they release the 3600 or stick exclusively with the 2600, remember, at this time, Atari is also immensely succeeding with its Amiga computers, and with less competition in the market, due to the absence of Jack Tramiel's ST. They still have a strong arcade game division. They still have and know hardware. And they are still an ideal global distribution partner for Sega. This time, when Sega approaches Atari, Atari knows it doesn't have enough software chops to support a platform all by itself, but seeking to further use its well-developed distribution channels for the Amiga, it takes the deal.
The 3DO was designed by the people who designed the Atari 5200, Atari 8-bit computers, and the Amiga (as was the Atari Lynx, which skips release in this timeline as Atari knows Sega is working on its own handheld color machine), so the design is a natural fit for Atari. The 3DO was originally envisioned on a napkin in 1989, prior to the Sega Model 1 arcade board, which would go on to inspire the Sega Saturn, so it's possible the designs instead merge into one and inspire the continuation of the Amiga line as well.
I prompted Midjourney to come up with a bunch of concepts for what an "Atari Saturn"' type American branding would look like- there are many factors why their fifth-gen console wouldn't have Jaguar branding, but these look sick so I'm also including them.
Atari 3DO:
Sega 3DO:
Atari Sega Saturn:
Atari Saturn:
Sega Atari Jaguar:
3DO Atari Jaguar:
Sega Jaguar:
If a competitive alternative to Sony is DirectX compatible, like the path Sega eventually went down, it's unlikely Microsoft enters the space on their own. In this timeline, the Sega 32X is never proposed or produced, and the Saturn does not have a store-exclusive launch before it's ready. This would leave Sega in a much stronger position for the fifth and sixth generations with retailers, who practically boycotted the Saturn.
...But that's a big if. This is the point at which it's impossible to say who wins out in the fifth generation, and where the market ends up. However, I do feel inclined to point out that in Japan, the momentum was with Sega Saturn until Final Fantasy 7 released...
Congratulations for reaching the end of the post. I hope you liked it. In the future I may write about the Sega-Bandai merger that nearly went through and the implications of a Sega Wonderswan. For now, you can look at more sick fucking mockups here.
.png)