Extremely similar to Atari's 8 bit computer hardware, the Atari 5200 SuperSystem was released in 1982 to compete with Mattel's Intellivision, but ended up being set against Coleco's Colecovision. Despite having much in common with the Atari 8 bit computers, including the Atari XE Game System, or XEGS, the 5200 does not share software compatibility with the others' cartridges. Memory addressing differs, so it would require reprogramming and readdressing to port games across the platforms.

The Atari 5200 was the first game console to launch with first-party analog controllers, though the less said about these defective monstrosities, the better. Their mean time between failure vies with the half life of Fermium. When working, the analog functions of the controllers work rather well in ports of track ball games like Missile Command, though the lack of auto-centering makes for frustration in games better served by digital controls, such as Pac-Man.

Atari, continuously shooting itself in the foot, devoted more development time to the over-saturated 2600 platform, leaving little for the new 5200. This resulted in a paltry assortment of titles available for the new system, a problem which was compounded further by the lack of backwards compatibility with the 2600. A later revision of the 5200 supported a 2600 adapter to remedy this oversight, but at that point, the damage was largely done.

Games released for the 5200 seldom took advantage of the beefier hardware the system brought, often being ports of underwhelming titles. This was not lost on Coleco, who exploited the graphical disparity rather handily. Due to obvious underperformance in its short lifespan, the Atari 5200 SuperSystem was unceremoniously cancelled with comments from Atari executives during the 1984 announcement of the soon-to-be-delayed Atari 3600, which would become the Atari 7800 ProSystem. This pattern of sloppy management would continue into the eventual launch of the next system and beyond.