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Time Machines: Atari's CES Endgame


Welcome to Time Machines, where we offer up a selection of mechanical oddities, milestone gadgets, and unique inventions to test out your tech-history skills. In the weeks leading up to the biggest gadget show on Earth, we'll be offering a special look at relics from CES' past.

Atari, a once seemingly untouchable gaming company, was beset by problems during the early '80s and saw its last chance for salvation in a fresh console release. It pitched this device, along with a very unique controller, at CES in 1984, but never managed to regain its footing in the industry. Head on past the break to find out more.

The Atari 7800 ProSystem

The state of today's video game console market is largely a post-apocalyptic affair. In 1983, a glut of manufacturers producing lackluster games and mediocre machines, paired with a helping of corporate greed ballooned into a mushroom cloud and the once-thriving world of home console gaming fell upon hard times. It is often referred to as the "video game crash of 1983" and the most visible protagonist of the story is Atari. While sales flagged and PC gaming began to flourish, Atari made a last-ditch attempt to revive its console-based livelihood with a hyped-up sales pitch at the summer Consumer Electronics Show (CES) in Chicago. Their motto was "June 3, 1984 - The Day the Future Began" and the pitch promised a new age for Atari, with its 7800 ProSystem, exciting games and a radical controller concept.

Atari's flagship console, the VCS 2600, was a monster success for the company and its stable of home arcade games was growing, with hits like Missile Command and Asteroids leading the charge. At the 1982 Summer CES, Atari announced a successor to its 2600 console called the "Atari Video System X," although it later earned its proper title as the Atari 5200 Super System. This sleek, wedge-shaped console had decent four-channel audio capability (due to its "Pokey" chip), but overly complex and ergonomically displeasing controllers hampered adoption. Atari also failed to incorporate backwards compatibility for its popular 2600 games and allowed its competitor, Coleco, to beat it to the punch with a ColecoVision-based adapter for 2600 games.

Atari's 5200 video game console.

Around the time that the 5200 was announced, a company of game engineers called GCC, which had a deal with Atari through its parent company Warner Communications, received a demo unit and had the same gripes as customers (if not more). It pitched a new machine based on its "MARIA" chip that would have better graphics and also provide backwards compatibility with 2600 games, solving two major issues. Atari, suffering from declining sales and poor management decisions, agreed to move forward on a new console, which later became the Atari 7800 ProSystem.

According to GCC chip designer Steve Golson's story, as told at the 2004 Vintage Computer Festival, there were problems behind the scenes in 1983 that exacerbated Atari's financial woes. Golson said the company had already decided to go with GCC's chip, but was also in the midst of a deal with Nintendo to use its Famicom chip for a console in the US. He believed Atari CEO Ray Kassar had planned to tie up Nintendo in a legal battle over the chip, blocking at least one major competitor as the 7800 hit the market. Amidst this soured deal between Atari and Nintendo and allegations of insider trading, Kassar was forced to step down and James Morgan took his place. Although tapped for the position in July, Morgan took two months off before setting to work. Upon arriving in September, he froze manufacturing to review the company's standing, resulting in Atari missing out on sales for the entire holiday season.

Despite the company's setbacks, Atari had already made major progress in development and by the winter of '83, marketing and packaging design for the 7800 ProSystem was underway. In May of 1984, the company announced the arrival of the new console as spearheading a new age for Atari. Not only was the system compatible with 2600 games, but it was also expandable, arriving with a keyboard peripheral to transform it into a home computer. It had redesigned the controllers, removing the overly confusing button layout, and even introduced an additional control option called MindLink. Combined with a wireless infrared remote, the MindLink controller would be strapped to a player's forehead, allowing them to control movement with their thoughts. In actuality, it measured muscle movement, more akin to sensing eyebrow raising and forehead wrinkling.

When Atari hit the floor at CES one month later, it was bolstered by a marketing manifesto with all the right buzzwords, an innovative oddity of a controller, a host of bundled games and its core device, the 7800 ProSystem console. Unfortunately, the sparkling future that the company hoped for was plagued by its undeniable financial failure the previous year. In July of 1984, Warner Communications sold the bulk of Atari's assets to Jack Tramiel, the Commodore International Ltd. founder. According to Golson's account, Tramiel arrived at the Atari corporate offices soon after the purchase and proceeded to fire about 75 percent of the staff. Not only was he keen on cutting workforce numbers, but he was determined to cut retail prices as well, aiming to sell the $149 Atari 7800 for an unsustainable $50 per unit. His radical markdown tactic never came to fruition and the console was put on ice until its eventual release to a moderately receptive audience in 1986. The MindLink, which was much better in concept than real-world application, never made it to market at all, sharing the same fate as previous Atari experiments like the "holoptic" Cosmos device, a tabletop game aiming to simulate a 3D holographic experience. While Atari continued on in a diminished capacity, the once-great gaming company slowly yielded its place in the next gaming revolution.

[Image credits: Evan-Amos / Wikimedia Commons (7800 & 5200 consoles); AP Photo / Charlie Knoblock (MindLink)]

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