Reviews unanimously praised its features but also noted its usability problems, including its difficulty and demanding system requirements.

When the new models of the XL series were introduced, Word Processor was abandoned in favour of a simpler program that would run on any machine.

William Robinson, author of Datasoft's Text Wizard, was hired for the new software project, with him modifying the program to run from a cartridge.

Unfortunately, the lack of useful business software hindered any sales to the office market, and the machine quickly garnered a reputation as a glorified games box.

[3] While the software program was feature-packed, including support for things like two-column layout and super- and sub-scripting, reviewers pointed out that it was difficult to use.

[3] Sometime in late 1981, Gary Furr left his job at GTE where he wrote application software specifications for government contractors.

Moving to Atari, Furr and product manager Peggy Allen soon began planning to replace Word Processor.

Instead of modifying the software, they decided to abandon it entirely, but not before Furr wrote the design specification for AtariWriter using Word Processor in March or April 1982.

[5] To bridge this gap, they hired 15-year-old William Robinson, the author of Text Wizard, to modify that program to run in a ROM cartridge.

[b] Robinson had previously written Text Wizard for the LA-based software company Datasoft,[7] and it had garnered good reviews while running in very little RAM.

[9] Final testing and documentation was largely complete by the February–March time frame, when a status meeting of the Home Computer division was held.

The manager refused to support non-Atari printers, and Furr had to call Robinson and tell him to remove the extra drivers.

A short section was added to the manual stating additional drivers would be available from the Atari Program Exchange (APX).

[11] Three additional minor upgrades were released over the next year, culminating in Version C. The program was an enormous success, becoming one of Atari's best-selling products of all time.

For comparison, the most popular word processor on the IBM PC during this era, WordStar,[14] had sold 650,000 copies across all platforms by the fall of 1983.

He continued to be the primary programmer on the core program, while Ron Rosen handled the mail merge, and R. Stanley Kistler the spell checker.

[23] AtariWriter Plus added a number of new features, giving it parity with the original Atari Word Processor in terms of power.

[22] The main difference compared to the original version was support for horizontal scrolling, which allowed direct editing of wider documents.

This had been one of the notable features of the original Atari Word Processor, which used the platform's hardware assisted scrolling system to rapidly move the entire document horizontally to allow editing at up to 132 columns.

The manual included an entire section on how to create your own printer driver, although the ones from the original APX disks continued to work.

The XEP communicated in serial, so some delays are seen when the complete screen is redrawn, like when switching to the menu and back to the document, but the system is otherwise similar to Plus.

Concerned that the new system would lack useful software at its launch, which could lead to the same issues that caused people to dismiss the Atari 800, they decided to port AtariWriter to the ST. Programmer Dan Oliver ported the existing assembly language AtariWriter screen editor code to the ST while John Feagans converted the layout and formatting handlers to the C programming language.

[29] Reviews of AtariWriter were generally positive, with critics pointing out a lack of features like printer drivers, mail merge and spell checking.

After noting that other printers, like the Epson in particular, were not supported, the article concludes "The AtariWriter has good documentation, is reasonably easy to learn and to use, doesn't seem to leave you hung up anywhere and has sufficient commands and flexibility to meet the needs of those who are most likely to use it... After a series of strikeouts, Atari has a hit on their hands.

"[30] Antic magazine lauded its speed, simplicity, and undo command, calling AtariWriter "fool proof".

"[31] Creative Computing published a more extensive review, calling it "a candidate for Best Atari Product in a Long Time."

Subsequently, Steve Ross hired M*A*S*H leading actor Alan Alda as a spokesperson for Atari in a five-year contract worth $10 million that would have produced television commercials for the company until 1988.

[36][37] Alda's relationship with Atari was announced at the Consumer Electronics Show in June 1983,[38] with a successful series of commercials on television launched that same year.

Alda offered a celebrity testimonial for the product, telling readers, "You get to spend your energy on ideas rather than typing".