Initially named Tramel Technology, Ltd., the company's goal was to design and sell a next-generation home computer.

[4] The Atari ST line proved very successful (mostly in Europe, not the U.S.[5]), ultimately selling more than 5 million units.

[6]Atari eventually released a line of inexpensive IBM PC compatibles, announcing a budget model at "a record-breaking price of under $599" in early 1987,[7] to be followed by a more expandable PC-2 model at a higher price point,[8] this being announced alongside the PC-3 in November 1987.

In 1986 a columnist for Atari magazine ANALOG Computing warned that company executives seemed to emulate Tramiel's "'penny-pinching' [and] hard-nosed bargaining, sometimes at the risk of everything else," resulting in poor customer service and documentation, and product release dates that were "perhaps not the entire truth ...

A post-acquisition audit ended on February 15, 1988, and identified $43 million in adjustments to Federated's balance sheet, far more than Atari anticipated.

[18] In March 1989, Atari announced that it would treat Federated as a discontinued operation and took an additional one-time charge of $57 million.

However, a shortage of parts kept the system from being released nationwide for the 1989 Christmas season; the Lynx lost market share to Nintendo's Game Boy, which had only a monochrome display, but a much better battery life, and was widely available.

However, due to a games library which was low in both quantity and quality, as well as being extremely difficult to program games for the system because of its multi-chip architecture, it was unable to compete effectively against the incumbent fourth generation consoles;[22][23] the Sega Saturn and Sony PlayStation would outsell the Jaguar in very large numbers late in its lifespan.

[25][26] Planning to initially launch with four titles, Tempest 2000,[27] Highlander: The Last of the MacLeods, Baldies, and FlipOut!, further releases would include Missile Command 3D, Return to Crystal Castles, Rocky Interactive Horror Show, and Virtual War.

Despite the Jaguar being a commercial failure, by February 1996, a series of successful lawsuits followed by profitable investments[clarification needed] left Atari with millions of dollars in its bank account but no new products to sell at all.

On March 13, 1998, JTS Corporation sold the Atari name and assets to Hasbro Interactive for $5 million,[3] less than a fifth of what Warner Communications had paid 22 years earlier.