Originally Posted by
kool kitty89
Nope, that was in '83, with Atari Inc and Ray Kassar. Apparently he'd already decided to go with the 7800 but was stringing Nintendo along in attempt to get an exclusive contract and lock them out of the US, or short of that (as it's extremely unlikely N would have gone for a risky deal) Atari wanted to stall and delay Nintendo's enterance as long as possible.
Kassars (over)reaction to Donkey Kong on Coleco's Adam was most likely part of this ploy to delay Nintendo as well. (in fact, Coleco was the first to secure rights for the game and Atari later managed to fine a loophole allowing them to publish it for their computers, regardless the version being played ont he Adam was, in fact, for the ColecoVision, with which the Adam was compatible)
In summer of 1983 Kassar was charged with insider trading, was later aquitted of the charges, but was forced to step down as President of Atari Inc. at which time, James Morgan replaced him and picked up a horrible mess to solve. At that point Atari was a mess internally and the home video game market was on the brink of the crash, pushed over the edge by Commodore that fall/winter. One of Morgan's first actions was to halt all activities (production, development, etc) for a short period to review everything he had to address. Unfortunately, this pretty much handed Commodore the 1983 holiday market for home computers.
Morgan was in the midst of reforming th ecompany when Jack stepped in with his offer. By that time, Warner was ready to give up and had been actively seeking buyers for Atari Inc. Jack took on the consumer properties and massive dept Atari Inc had accumulated, so we'll never know if Morgan's efforts would have been successful. (note that the 7800 was ready for release in 1984, had already had limited/press releases that year and was building up for a full release; however who knows how that would have gone with the market in the state it was in '84; by '85 things had settled for sure though, with the decent demand shown by 2600 Jr sales -which Katz commented were mainly limited by their production capacity)