Atari was a giant home computer and console manufacturer and software house based in Sunnyvale, California, United States, that made some of earliest popular video games, and invented the concept of home video games consoles in the 1970s.
They company grew rapidly through the 70's and 80's, with its earliest console, the Atari VCS being a huge hit. It also released a series of 8-bit home microcomputers that were successful in the US, and a 16 and 32 bit series of home computers that were very popular in Europe. However, in the mid 1980s Atari began to fall behind in console development as it's VCS (now the "2600") technology began to fall behind more sophisticated systems from Nintendo, and lacked backward compatibility with the huge and much loved range of 2600 titles. Atari's answer with the 5600 console was expensive and difficult to program, though technologically impressive.
Atari corrected its mistakes early, developing the 7800 by 1984. However management changes and cash flow issues forced the machine, which at the time was one of the most advanced at the time, to be delayed for almost 4 years. By the time it was properly released in 1987 it was already obsolete. Atari, despite coming up with numerous other technologically sophisticated ideas would never be able to regain the market, and despite having an excellent group of experienced engineers and a strong brand essentially struggled from one management and marketing crisis to another. The first palmtop computer, first 16-bit handheld console, first 64-bit console and also several firsts in business computing, including the first MS-DOS palmtop computer and first small office affordable DTP and UNIX workstations all failed to make an impact.
Atari was sold, in 1996, to JTS, a small hard drive manufacturer. All development work on new computers and consoles had ceased several years before, despite several prototypes being fully functional and practically ready for commercial release.