Atari XL Computers: News Articles 1983-1984  











In July of 1983 James Morgan would be named as Atari's new CEO. Replacing Ray Kassar who had been fired by Warner Communications Chairman, Steve Ross.   Kassar had been let go for multiple reasons.  Ross had lost all faith in Kassar managing the company. 

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Kassar's Autocratic management style of having to be central to any and all decisions within Atari, coupled with his lavish rewards to himself and his marketing and sales managers while treating the engineering and software employees as trivial and unimportant in his view.    He repeatedly issued constant cancellations of new products & technologies because they threatened sales of the Atari 2600 VCS.  This left Atari as a marketing company without leading edge products to sell to keep it ahead of an oncoming tsunami of competitors with equal and/or better products. These actions had destroyed the company from within.

As Kassar was fired and James Morgan hired as his replacement, the beginnings of a string of bad decisions coupled with poorly thought out actions would again put Atari in a continued direction towards its own undoing.

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James Morgan accepted the new position, but the stipulation would be, he would not start work at Atari for 2 months, leaving the company without a CEO or direction.  Steve Ross would call Ray Kassar and ask him return for 2 months as a consultant.  After expressing his shock and insult that Ross would fire him and then ask him to return, the two came to an agreement and Ray Kassar would continue on - only as a figure head, for 2 months to save public face for Warner Communications and Atari.  Meanwhile Atari is facing production issues which result in a delay of the release of the Atari 800XL's, this delay will be further worsened once James Morgan arrives in September.

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James Morgan, by not starting in July to give himself the needed time to get up to speed with the state of the company, its projects, goals and deadlines would be the first in a series of initial critical error's on James Morgan's part.  He could have spent July through August assuming lead roles in critical project decisions and also, during the more relaxed days of summer, enacted his 30 day review period instead of doing it when he came on board in September.  

For a consumer electronics company, the months of September and October are some of the most critical months to make final preparations for manufacturing, shipping and distribution of products for the all important Christmas sales season where most companies can make as much as 70% of their yearly revenue.  Instead James Morgan started his new position as CEO in September. He then instituted a 30 day freeze on all projects to evaluate the company.  This was the most serious tactical error on Morgan's part. This would cripple the company's ability to function and prepare things that needed to be readied.

What then followed were two of the most serious error's James Morgan would make in his entire time at Atari:  The first: was his choosing to delay manufacturing of the Atari 600/800XL computers for 30 days to have them built in Atari's new plant instead of the existing one.  This new plant however, wasn't ready yet which was the reason for the 30 day delay. This completely destroyed any chance of Atari shipping product to meet the 1983 Christmas retail season demand.  Atari would lose millions of dollars in badly needed profit over this decision.

Even worse - Atari handed the 1983 Christmas sales season over to Commodore to sell its products with practically no competition.   Atari desperately needed market share of its computers out into the retailers for the 1983 Christmas season.  This would further impact Atari's post season sales because it would lose the large amount of secondary purchases in January of 1984: Disk drives, printers, modems, software and games.

The second major mistake was the announcement on November 9th that Atari would actually be RAISING its prices on its two new computers, the 1027 printer and its video game consoles.   The idea was that the market was spiraling to the bottom in pricing, mostly due to Commodore, so James Morgan thought that since Atari's computers were a much higher quality (which compared to the utilitarian C64, they were.)   And he felt they should be priced higher.  However in a feature for feature comparison, most consumers look more to the price and many times will live with the lower quality product.  This whole price raising idea would backfire and further hamper sales of Atari's new XL computers.   What Atari needed were new higher end computers that could compete more with the Apple ][ and IBM PC and be out of the feature range of the VIC20 and C64 so as not to compete in that level of pricing.


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The new higher end machines, however, along with many other higher end products were put on the chopping block and canceled by James Morgan:  The 1400XL & 1450XLD are canceled. So is the 1600XL IBM Compatible system, the Atari 1060 CP/M module and the Atari Graduate computer keyboard add-on for the Atari VCS.

However, there is a glimmer of hope.  As 1984 comes around, despite starting off the year having to layoff nearly 1,000 employees, things begin to significantly change within Atari's management structure and day to day operations.  Daily meetings, project status reviews, progress reports, tighter budget management have all been implemented.  Groups within the HCD (Home Computer Division) have been communicating better, sharing idea's and project information.  Atari reinstates the Atari 1450XLD back onto the schedule as a product to be released in 1984.  Also the Atari 1090 expansion box development moves into high gear.   Development of several key expansion cards has been spec'd out and Atari begins to hire outside contractors to design and build these new cards.  Among them, the former contractor of the Atari 1060 CP/M box is now hired to develop an 80 column card, CP/M card, LCD display card, BSR/Realtime Clock card and an MS-DOS disk drive compatible controller card.

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Do you have any internal Atari Memo's from this period of time? Do you have any original newspaper/magazine clippings of Atari from this time?  Please CONTACT US if you would be willing to donate them to the Atari Museum archives project.