Classic Computer Magazine Archive Article from Compute! magazine

Atari Rumors
I bought an Atari 800XL, and heard recently that Atari was going out of business. If this is true, will other companies continue to make hardware and software for the Atari computers?
Ernest Madrazo

It's too early to count Atari out of the fight yet. Not only does Atari have every intention to stay in business, it even plans to introduce some new, more advanced home computers in 1985 (see "The New Atari: Q & A With Sigmund Hartmann, Atari Software President," COMPUTE!, February 1985).
    The rumors started when Atari lost more than $450 million in 1983 and was sold by Warner Communications to Jack Tramiel in July 1984. Tramiel, of course, is the founder of Commodore Business Machines and left that company in January 1984 after a management dispute. Tramiel is currently attempting to rebuild Atari and pay off its debts.
    Although the prices for the 800XL and its peripherals were cut drastically in late 1984, Atari denies that the line will be dropped. In fact, Atari had plans to introduce an upward-compatible 128K version of the 800XL at the Winter Consumer Electronics Show.
    Some software manufacturers are delaying distribution of new Atari software while they wait to see what happens, both at Atari and in the home computer market in general. Indications are that prices are dropping, and we've heard that some good software in the $8-$12 range may be sold in department stores and drugstores to encourage impulse purchases, as with records and books.
    Even if the worst happens and Atari folds up or drops its current line, independent manufacturers will continue supporting the machines as long as their stocks last and demand exists. The installed base is just too large to ignore.