Following on from information collected in my previous post: (don't worry about the title, it has shockingly little to do with Sega lol)
Friends, I am happy to report that above, I had just barely scraped the surface of what a redo of 1982 (and 1983) looks like for Atari and the video game industry as a whole. I hope you're prepared, because this timeline goes some ridiculous places. From just one change (ok, two changes, the Intellivision stuff is pretty isolated) in video game history, prepare for a world where edutainment and kiddie software never died, Amiga killed Macintosh, BeOS thrived, the 3DO held its own, and Atari is a name as big as EA.
In my first post, I supposed that the Atari that joins forces with Sega is one not owned by the Tramiels, who bickered with Sega over financial points because they were cheapskates, one that is also selling the Amiga and arcade hardware. This would have required someone to buy all of Atari, either Namco (which would have made zero sense for them) or Sega (who may have been pleasantly surprised by the Amiga contract as a late 80s side venture, but probably would not have understood the merits of its operating system and would have binned everything else); for Warner to spin Atari off as an independent, united company, without Namco's involvement (for which it's hard to imagine a scenario in which both Namco and Tramiel are not in the picture); or for Atari to make smarter decisions leading up to the video game crash, and not be sold off at all. I mostly investigated the third option, to emphasize ways Atari could have had more longevity.
As stated in the previous post, the 5200 does not exist, and the 7800 (with music chip) was released in early 1983 bundled with Mario Bros. to compete with the ColecoVision (and create a platform where Atari wasn't competing with unlicensed third parties) as the 3600 ProSystem. Its chunkier but more elaborate graphics would have stopped the ColecoVision's obvious graphical advantage in its tracks, and seeing that Coleco had essentially no ability to develop proprietary graphics hardware, the most optimistic and interesting outcome would be for them to pivot mostly away from video games and become the American face of the MSX standard, which was built on the same hardware- though they would have been met with the same stiff competition from Atari and Commodore, and likely would have ended up as a footnote, especially owed to their notoriously shoddy build quality. They would continue publishing third party software for the rest of the short lifespan of the ColecoVision, but they would have little cause to develop for the 3600 and embarrass their own hardware, as shown by them publishing nothing for the arguably (and allegedly) more powerful Atari 5200.
As for Intellivision, scrapping the overdesigned Keyboard Component earlier in favor of OTL's eventually-released ECS (releasing nothing was not an option due to FTC enforcing an advertisement claim that the system would be expandable into a computer) would have been a good first step, and abandoning the Aquarius computer should have followed. The unfocused Intellivision IV (link) should have similarly been cancelled for the nearly as powerful Intellivision III (link), but just the Super-STIC and the RAM; no Intellivoice, no audio/controller expansion (already included in the ECS anyway), probably a much less expanded EXEC if it would have caused delays, instead develop a standard code library for developers to use and publish it in a book. In our timeline, the Intellivision had an interesting sort of afterlife throughout the rest of the 80s as a more educational, family-focused offering at a competitive price point. This sets the template for what the Intellivision III (initially available as an expansion to the Intellivision II known as something like the Super Upgrade Module for $50-$100) would live as.
However, there were a few fundamental problems with the Intellivision business model. The first was that, like Atari, Mattel did not anticipate or really desire third party development on their console, and due to the lack of a licensing system, stood to gain absolutely nothing from it. (From what I can tell, even the 5200 was a totally open platform, unlike the 7800- another huge oversight in its story. With a licensing system in place to whittle down the third-party competition whittled down to Activision, each-other, and Parker Bros. (probably until 1984 like in OTL), the overproducing cartridge market of 1982 and 1983 would have been less of an issue for both companies going forward.) The second was that Mattel Electronics specialized in a broad range of entertainment software... that wasn't really selling. The console market wanted action games, and ports of arcade titles especially. Mattel's sorts of games did better in the computer market, which may have further incentivized Mattel to push itself in that direction, but they had no capacity to be the only software company supporting the broad range of use cases computer users were after, like the much larger Atari tried to be with its computers. They ended up caught in the middle, too high-brow for the gamer and too casual for the working man. Drowned out by Commodore, Coleco, and Atari, 1983 was a totally disastrous sales year for them; the Intellivision III would only have succeeded in getting Coleco and half of Atari off their backs, and even then, Coleco, Parker, and Atari were all buying up licenses to arcade games while Mattel was too busy bleeding money. These factors lead me to believe that not much would go differently for Intellivision. What I do think is that with a marginally more well-established ECS, Mattel would have been well-positioned to market itself as a family-friendly computer ($150+$150 was fairly competitive with Commodore 64's $300 price point in 1983) with a lineup of quality entertainment software, and, through the Super Upgrade Module, offer next-gen games on the side (it would have been easy and natural to have software run on the base model or with SUM enhancements, as one piece of ECS software works the same way).
From here, Mattel Electronics would have been somewhat pigeonholed as a (relatively) low-cost computer platform with quality software, much more comparable to the Atari computers than to the Atari consoles. Perhaps they could have kept adapting into the 90s if they remained at a low enough price point, but eventually the world moved on to CD-ROM and 256-color graphics, and I'm sure you can see why I don't see that happening here; every prospective new buyer after 1992 would have already been getting a "real" computer capable of much better edutainment and games. But don't forget that Mattel was also a cross-platform publisher, and I can see them becoming quite a force in computer software, much like The Learning Company was in ours- in fact, in OTL, Mattel actually re-entered the CD-ROM market and acquired TLC in what has been referred to as "one of the worst acquisitions of all time"! If Mattel had been more established and perhaps passed on the acquisition, perhaps the market would not have dried up around the year 2000. (You can read more about that here, it's really fascinating. In fact, I want you to, so I'm embedding it.)
Now with that out of the way, we are brought back to Atari. With a more solid and early start against Nintendo- for example, consider all of the Atari 5200 games that never made it to 7800 that would have instead come out for 3600, and all of the Atari arcade games that would be exclusive to 3600 and not come out on Nintendo hardware at all- and a larger emphasis on software development under Warner than under Tramiel, the 3600 would have a much larger market share, and possibly wouldn't even be overtaken in sales. They could have easily responded to Mario with something like the modern homebrew title Bentley Bear's Crystal Quest. However, it would still have far less games overall. In the face of Ghosts 'n' Goblins, Zelda, Metroid, Castlevania, and so on, the NES would be gradually encroaching on Atari's market share.
Remember that in this timeline, Atari owns the Amiga. With the Sega Genesis around the corner, they would have two options; make a console-ized Amiga with a cartridge slot and continue relying on themselves and whoever wants to make cartridges (EA, mostly; also Mattel, Activision and LJN, and Broderbund providing cartridge and marketing services to smaller third parties), or join forces with Sega. I have them sticking to their tech, for a few different reasons. In 1988, nobody knew Sonic The Hedgehog would come and change everything in 1991. From Atari's perspective, Sega is in a similar situation as them, with a near total lack of external support from Japanese third parties. By acquiring their hardware, they would really only be gaining one software partner. Sega may be arguably the biggest video game developer in the world at this point (our timeline too- Sega was much more prolific than Nintendo in arcades and put out many more games for Master System than Nintendo released for NES), but they were also Atari's rival in arcades.
This timeline also sees much more robust support for the Atari Lynx, which is neat. Rather than being designed by ex-Amiga engineers and passing hands through Epyx and then Atari, the design would have originated in-house at Atari. Those same engineers would go on to design the 3DO hardware.
But the hardware was just one component of the 3DO. The 3DO as we know it was mostly the child of EA CEO Trip Hawkins, who saw the console of the future as 3D-enabled, CD-enabled, multimedia-enabled, a licensed standard across multiple manufacturers, and friendly to third parties, with royalties of just $3 per copy. Atari's 3DO would most certainly be the first three things, and would likely offer an even better deal- free! (Or perhaps not- I just think it's worth mentioning that Atari could and has in the past profited without any third party licensees.) Perhaps Trip passes along the idea of reaching out to companies like Panasonic to give the 3DO (which, in this timeline, might very well have been called Jaguar) more of a foothold, especially in Japan. Atari, having never been able to crack the Japanese market, would have nothing to lose at this suggestion.
In our timeline, the 3DO was available as an expansion for PCs. As Amiga had made its name in graphics and 3DO was the next generation from the team, it follows that Atari would have looked to integrate 3DO technology into their computers. As 3D graphics were rather superfluous for home computers, especially 2 years before they would even be available for PC, 3DO would be an expansion for Atari computers, and perhaps not only Atari computers... (Edit: Perhaps not even only computers! If the M2 had come out in 1996 and started licensing itself out to DVD player manufacturers in 2000 like the rather poorly-designed and expensive Nuon did in OTL, they could have really taken over! If your DVD player could play above-N64 quality games, you would have never bought a console.)
Speaking of Atari computers, where are they at? Well, unlike in OTL, Amiga would have excellent software support. It's often said that the IBM PC was built on the back of Lotus 1-2-3 spreadsheets and Macintosh on the back of Aldus PageMaker and Apple's LaserWriter printer. If Amiga had these or equivalents, it would have undercut the competition on both price and functionality. Seeing as this timeline has no 4th platform in the form of the Atari ST, the Mac could survive in 3rd place, still cornering the education market on account of Atari's stigma. At around the time of the 3DO's release, the Mac was wrapped up in the necessity of switching to a new kind of processor for the first time (from 68ks to PowerPCs) and overly ambitious attempts to upgrade its OS that missed the point entirely, which in the long run led to the acquisition of Steve Jobs' NeXT and the transition to Unix. Both Amiga and Mac would have been struggling with starting from scratch in terms of native, non-emulated software, on operating systems that were starting to become long in the tooth. (AmigaOS doesn't even have protected memory!) Atari needed to release something familiar to users and developers, but future-facing and robust, with features like protected memory and symmetric multiprocessing, and they needed to do it quickly.
Luckily for them, the frankly gorgeous and elegant BeOS was waiting in the wings. When developer previews of BeOS go out in 1994 with all the features Atari management is anxious about, code just as clean as AmigaOS, and an interface and API so reminiscent of Amiga that it was affectionately referred to as "Amiga 96", Atari jumps at the chance to make this their direction and acquires Be. This design language could have been the standard! We have been robbed!
"FOUR somewhat healthy competing consoles?", I hear you object. "Zilchexo, this is madness! Three is already pushing it, which is why Sega left hardware and Nintendo repositioned!" Ah, dear reader, how quick you are to forget! The late 80s were host to FIVE companies each enjoying their own version of success: Nintendo, Sega, Atari, NEC, and as a bit player in mail-order catalogs and other weird places, Intellivision! So NAY! Nay, I say to that! Hypocrite and fool that you are, I dance in the shame of your hubris and drink your delicious tears! I freely admit four is a lot, but can you deny the logic of Atari remaining a company free of licensing fees and offering consoles as an extension of its computer hardware and software enterprises? No, you shan't! I forbid it! You shan't and you won't, for I have bested you in the battle of wits! O, shame, shame! Your humiliation is limitless, and my mirth made from mockery most boundless! Ahem. As for how all this shakes out, 3DO remains last place globally, but a stubborn last place. Like Microsoft now! Atari and Panasonic go on to put out M2 and MX from the same designers, constituting a middle platform between the open standards of the PC world such as DirectX and the closed standards of the console world.
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