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Article #218 (376 is last):
From: aa399@cleveland.Freenet.Edu (Len Stys)
Date: Thu May 10 18:35:12 1990

(Reprinted from the CLEVELAND PLAIN DEALER, May 8, 1990)


     SUNNYVALE, Calif. - Atari Corp. President Sam Tramiel is not one to shy
away from a fight, but taking on powerhouse Nintendo of America in the
fledging market for hand-held video games may be like an 80-pound kid
trying to knock out a heavyweight champ.

     Many observers say Atari, primary a seller of computers overseas, is
foolish to go up against the Nintendo juggernaut.  On the strength of its
Nintendo Entertainment System, found in 20% of all U.S. homes, Nintendo has won
an estimated 80% of the home game market, bashing home based system of
Atari and Sega.  Atari's main entry to the hand-held category is selling at
double the price of the comparable Nintendo model.

     But despite the long odds, Tramiel is determined to slug it out.  His
strategy for winning will be to tout the superior graphics, color display
and multiplayer capability of his company's Lynx portable system.

     The stakes are high.  For 1990, the U.S. home video game market will be
worth an estimated $5.1 billion.  Atari, trying to bounce back from an
ill-fated venture into consumer electronics retailing, can scarcely
afford another financial setback.

     Sparring with rivals comes naturally to Tramiel, son of Atari
Chairman Jack Tramiel, a scrappy fixture in the computer industry.

     The Tramiels - including Sam's brother Garry and Leonard, both Atari
vice presidents - are pinning their hopes for a hefty share of future sales
=n Lynx, which barely made it to market in time to compete for holiday business
last year with Nintendo's Game Boy.  Such battery-operated portable systems
run on small game cartridges plugged into machines a bit larger than a Sony

     Hampered by what Sam Tramiel called "logistical" problems and
"under-ordering" by some retailers.  Atari is attempting to speed production
and to bring out more game titles.

     As it was, Atari had only enough supply late last year for the New York
City and Tokyo markets, where Lynx's color display and superior graphics did
indeed lure many customers away from the Game Boy.  That was despite a
selling price for Lynx hardware of $179.99 compared with Game Boy's $75 to

     Since then, Atari has rolled out the product to New Jersey, Califonia,
the Chicago area and several overseas markets, although shipments frequently
are weeks late.  By the end of May, Tramiel said, the company expects Lynx
to be available nationally in about 1,500 outlets.  Game Boy, meanwhile, is
in 15,000.

     Nintendo of America, the Redmond, Wash., subsidary of Nintendo Co. of
Japan, projects $950 million in 1990 sales for its Game Boy product,
introduced in mid-1989.  Sam Tramiel calls $200 million an "optimistic" but
attainable number for Atari's Lynx system this year.

     In February 1989, Atari filed a $250 million suit against its huge
rival, alleging that it violated antitrust laws by preventing designers
of software for its game consoles from selling their wares to makers of other
systems.  Nintendo has called the suit "meritless."

     As with all video games, Sam Tramiel said, software is crucial to
Lynx's success.  Blessed with more plentiful games and a lower price, Game
Boy has zapped Lynx in terms of number of units sold.

     Tramiel pointed out that more than two dozen programmers worldwide are
working full tilt to produce games.  Even so, Atari projects it willhave
only 25 titles available by yearend, compared with as many as 70 for Game



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