this post was submitted on 20 Aug 2024
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Didn't help that the games weren't there for it either. But the vicious cycle of "console needs games to sell units -> devs won't make games for consoles that don't sell" was in full effect for the 7800, and really any Atari console after the 2600, except maybe their Lynx handheld (which still lived in the Game Boy monolith's shadow just like every other competing handheld).
The crash was such a huge loss. This thing in 1984 was an evolutionary but very nice update to the 5200. Seriously, look at Asteroids on the 5200 (prototype, but very similar to the 400/800) and 7800, which looked low-key gorgeous on a CRT.
By 1986, Nintendo was the bold savior of the console market, and even then there's an alternate universe where Atari completely abandons the 7800 and XEGS to re-brand the NES or, later, the Sega MD/Genesis.