The Atari 7800 is a video game console released by Atari in June 1986 (a test market release occurred two years earlier). The 7800 was designed to replace the unsuccessful Atari 5200 and re-establish Atari's market supremacy against Nintendo and Sega. With this system, Atari addressed all the shortcomings of the Atari 5200: it had simple digital joysticks; it was almost fully backward-compatible with the Atari 2600; and it was affordable (originally priced at US$140).
The 7800 was the first game system from Atari designed by an outside company (General Computer Corporation; future consoles designed outside the company included the Atari Lynx and the Atari Jaguar). The system was designed to be upgraded to a full-fledged home computer — a keyboard was developed, and the keyboard had an expansion port (which was the SIO port from Atari's 8-bit computer line) for the addition of peripherals such as disk drives and printers. GCC had also designed a 'high score cartridge,' a battery-backed RAM cart designed for storing game scores. Atari manufactured none of these accessories, and after the initial production run they also eliminated the expansion port. In 1987, the Atari XEGS was released and came with a light gun, called the XG-1. The XG-1 was fully compatible with the 7800 and the 2600. Atari released four games on the 7800 that utilized this peripheral.
The Atari 7800 ProSystem was test-marketed in southern California in June 1984. One month later, Warner Communications sold Atari to Jack Tramiel, who did not want to release a new video game console under his newly formed Atari Corporation. He pulled the plug on all projects related to video games and decided to focus on Atari's existing computer line in order to begin development of the new 16-bit computer line (which appeared as the Atari ST). The 7800 was re-introduced at the end of 1986 after the success of the Nintendo Entertainment System proved that the video game market was still viable. Unfortunately, by the time the 7800 made it to market, the NES had 90% of the American market cornered and the rival Sega Master System had most of what was left.
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