The Atari XE Game System started out as just that, a game system. Once Atari released an add-on keyboard for it though, the keyboard turned it into a full-fledged Atari 8bit computer, that had the same ports and capabilities as the rest of the 8bit line, including being able to use the same disk drives and such. When the keyboard was not attached the system would come up with Missile Command which was built into ROM. When the keyboard was attached the system would come up with Atari Basic. The system was packaged with console, keyboard, joystick, light gun and several software packages. The graphics are slightly improved over earlier versions, and since this is the only one of the Atari 8bit line to have a detachable keyboard, the normal function keys, such as RESET and SELECT, are located on the system unit itself, vice the keyboard. The XE has a single exposed cartridge slot on top, two joystick ports and a single general purpose I/O port. The cartridge slot was enhanced and intended as a replacement for the PBI used in the XL series. The case is grey, more in the style of the ST line of computers, with pastel colored function keys that are round and oversized. The XEGS was released in November 1987.

The Atari XE or “XEGS” was basically an Atari 65XE in a console case. While it was marketed as a console/computer hybrid, it was viewed as neither by the majority of people and often times completely ignored by gaming historians. Since it is basically identical to Atari’s line of XE computers inside, and even came standard with a keyboard, many don’t consider it a system. But, with the inclusion of 2 joystick controllers and a light gun (available with the purchase of “Bug Hunt”), this cartridge based “computer” must be considered a system by the serious collector. Using a TV as its primary display, a built in version of Missile Command, and interchangeable games on cartridge format, this unit meets every criteria set forth to be a video game console. Since this system was able to play all compatible games from previous console releases, and it’s 400/800 computer line, it was advertised as having the largest library of games available for a home console. But Nintendo wasn’t too fond of this statement since they didn’t feel it was entirely true. A lawsuit launched against Atari by Nintendo quickly ended this ad campaign by Atari, and Nintendo resumed it’s steady climb to the top. Jack Tramiel was more fond of the XEGS, but seeing Nintendo’s rise to power prompted him to release the previously shelved Atari 7800. While many viewed this as the only appropriate thing to do, the XEGS would all but die because of it. While it boasted a different library of games, the XEGS was still an older console with more of a “computer feel” then the 7800 had. Home gamers weren’t looking for a computer, they wanted a console. And now with the introduction of the Atari 7800, not only was the XEGS competing with Nintendo, it was competing against it’s own company. With this type of marketing, it’s no wonder Atari failed. With a large library of quality games and quality construction, the Atari XEGS should have done better then it did. But with resources stretched as thin as they were, and an eminent saturation of the market, gamers chose to back the NES or SMS instead of the Atari consoles.