A fascinating twist in the annals of Amiga and Atari in particular is that Commodore was ultimately fighting against “one of their own” in Jack Tramiel. Tramiel had founded Commodore, and the PET, VIC-20 and Commodore 64 computer lines were released during his leadership there. He left Commodore in 1984 and later that year purchased the Atari division from Warner Brothers, which owned the struggling brand at the time. Tramiel then formed Atari Corporation and lead the company to focus on the 16-bit Atari ST line of computers. Those computers, ultimately, became a direct competitor to Commodore's Amiga. And so the circle was complete.
Jeremy Reimer for Ars Technica in 2005:
Tramiel's shocking departure made headlines and is still archived online at the NY Times.“Jack Tramiel had left the company in a dispute with his financial backer, and had purchased Atari's computer division. He spearheaded the rapid development of the Atari ST, sometimes called the "Jackintosh." It also used a 68000 [like the Mac and Amiga] but lacked the Amiga's advanced custom chips and multitasking operating system. Nevertheless, it was still capable of playing great games, and its cheaper price (it originally retailed for US$799 with a monochrome monitor) hurt Amiga sales.”
The Amiga was released in the summer of 1985 and began to make some waves by 1986. By 1987, Commodore finally released the Amiga 500 and 2000 under pressure from competition by Atari attacking its very similar market.
Jeremy Reimer again for Ars:
Ultimately, this is where a bit of the Amiga vs. Atari fan-wars emerged and still exist today, although with much less fervor and teeth gnashing. Time cures all, right? The truth is the two fanbases share much more in common than they realized back in the pre-internet days.“Meanwhile, the Atari ST's momentum tailed off, with sales slowly declining as better games started coming out designed specifically for the Amiga 500. Atari did not release any new models of the ST except for a version with extra RAM preinstalled. Thanks to the inclusion of a MIDI port with every model, however, the ST became the computer of choice for digital musicians.”
So how do the Atari ST sales and marketshare actually stack up?
According to research by Reimer, who gathered his figures from various annual reports, International Data Corp (IDC) forecasts, Gartner Dataquest research, as well as a few magazine articles from the 1980s (most of which have gone dark online since originally compiled, unfortunately). The numbers were pretty grim for both platforms when looking at the larger overall marketshare picture.
See the chart below (numbers are in 1,000s) for Reimer’s original analysis of quantities sold for the Amiga and ST lines. I include the Amiga, it’s step-brother of sorts, for comparison’s sake.
To try and validate these figures, I took a look at Atari's 10-Q filing from 1989. While the numbers aren't an exact match (the 10-Qs don't explicitly show sales figures for specific product lines), the numbers do seem to follow the proper trends. Atari reported a slowing down for 1989 compared to 1988, which is reflected correctly in Reimer's data.
In the 10-Q filing:
Atari wasn’t the only company feeling this shift in consumerism, as we all know. What ultimately was witnessed with the Amiga in the US mirrored Atari’s ST experience as PC clones flooded the US market. This gave a short lifeline extension to both brands in the European markets in the early 90s before both companies finally fizzled out.“The decline in total sales for 1989 as compared to 1988 can be attributed to the decline in the United States of our traditional video game line. European markets continue to out-perform all other markets in both computers and video games.”
1988 looks like an insanely rough year for Atari in the Net Income graph below, but much of the drop was due to a previous acquisition of 67 Federated electronics retail stores, which was thought would dramatically expand Atari's distribution for its well-regarded, inexpensive line of personal computers while enhancing Federated's ability to compete.
From the NY Times in August, 1987:
That was surely a Hail-Mary attempt to keep a foothold in the music industry since their fortunes in the computer industry were fading.“Atari has essentially decided to buy distribution in the United States because it has been stymied in its attempts to persuade established retailers to carry its wares. Two-thirds of Atari personal computers are sold in Europe. Major American dealers, such as Computerland and Businessland, have declined to carry Atari machines, partly because Atari has an image as a video game company whose machines would not appeal to corporate customers.”
“The retailers perhaps are also wary of Atari's chairman, Jack Tramiel, who, in his days as head of Commodore International, undermined his dealers by slashing prices and moving his computers to mass merchandisers such as K Mart. Atari now has 800 dealers, Mr. Pratt [Atari's chief financial officer] said. That is about a half to a third the number of Apple and I.B.M. dealers, and many Atari dealers are not computer specialists. Atari recently began recruiting music stores to carry its machines, for instance.”
What Atari didn’t know was that the debt Federated brought with it was much higher than had been originally reported. This, on top of a DRAM shortage in 1988 helped fuel the fires that were smoldering at Atari HQ.
On page 27 of the 1989 financial report, Atari said “Sales of ST and PC products [emphasis mine] increased by 9% to $322.0 million, or 76%, of total net sales in 1989, from $296.5 million, or 66%, of total net sales in 1988.” This doesn’t give us exact sales figures for the particular product lines, but a glommed together sales revenue picture. So the report says sales revenue increased slightly overall, while Reimer’s data shows a slight decrease in the ST line’s sales. This certainly could be the case, as 1989 also saw the introduction of the Portfolio, Lynx, and STACY products.
By 1993, Atari ceased development of the ST computers to focus on the Jaguar game console - the last console to bear the Atari brand. The Jaguar was discontinued three years later as Atari Corp began to exit from existing as an independent company and its hardware days were over.