In 1984, when Jack Tramiel bought the home computer and video game divisions of Atari, Inc. to form Atari Corporation, one of his first orders of business was to kill plans to release the Atari 7800. Tramiel chose instead to put the focus on the Atari ST line of computers. However, with the success of the Nintendo Entertainment System in 1986, Tramiel decided to give the home videogame industry another try by dusting off the Atari 2600 and launching the Atari 7800 with three games. The XE Game System, a console based on the 65XE computer, followed in 1987. Having three game systems from a single company competing against each other was not the way to take on Nintendo, and all three systems failed in the marketplace.
Atari tried again in 1989, this time in the fledging handheld arena. They introduced the Atari Lynx, a color competitor to Nintendo's monochrome Game Boy. Despite having a superior product, delays in production and Nintendo's brand recognition meant the Lynx never really had a chance. Atari stopped supporting the portable in 1994.
The 64-bit Atari Jaguar, first available in wide release in 1994, was Atari Corporation's last stab at being a hardware manufacturer. In a highly competitive market, the Jaguar could not compete against rival systems from Nintendo, Sega and newcomer Sony. In 1996, Atari Corporation merged with hard disk manufacturer JTS, who then subsequently sold all of its Atari-related properties to Hasbro Interactive for $5 million in 1998. ~ Skyler Miller, All Game Guide