The release of the 5200 Supersystem in 1982 represented Atari's attempt to replace their outdated 2600 model and pull ahead of rival, high-quality platforms like Intellivison. By 1982, Atari game programmers realized that they were severely limited by the capabilities of the 2600 system.
The designers incorporated technology into the 5200 (called "Pam" in developmental stages) which they had just developed for their own 8-bit 400 and 800 series personal computer systems. The 5200 is basically a game console version of their home computer, substituting a controller in place of a keyboard.
The Intellivision system had raised the stakes in the gaming industry with its 16-position controller. Atari's own 2600 offered only 8 positions. In hopes of obliterating the competition, Atari designer, Craig Asher helped engineer the "analog" controller. It gives players full, 360° control of the action on-screen.
The 5200 controller contains two other features which made Atari's unique to any other system built by 1982: First, It offers speed variability. When a joystick is held in a single direction long enough, a player can increase his or her rate of on-screen movement. Second, it contains an easy-access PAUSE button, enabling players to easily freeze their games indefinitely. This immediately became a normal feature on most every subsequent system controller.
Unfortunately there turned out to be a major drawback to this groundbreaking technology. The analog controllers never caught on with consumers because they are "non-centering," meaning they do not feature a neutral position. There is no way to come to an immediate stop. This factor will tend to inflict a high level of frustration on any 5200 player who tackles a game which requires precision stopping and starting movements like Frogger or Pac-Man. The controllers were also apparently not made with durability in mind and are quite easily broken.
When Atari released the 5200 it was incompatible with 2600 cartridges. Consumers who had loaded up on games for the 2600 were understandably reluctant to invest in an entirely new platform. Its initial retail price of $330 didn't cause units to fly off of the shelves either.
The 5200 also improved on the 2600 in its switch box. The 2600 system requires players to walk behind the television and change the setting on the box setting from TV to GAME. The 5200 automatically switches to GAME after the power is turned on. Also, when changing cartridges, the 5200 shifts to a black screen instead of the annoying, white noisy static players get between games with the 2600.
When the platform was launched in 1982, Atari chose not to support it with any "must have" new titles. Instead they decided to re-release improved versions of former best seller for the 2600 like Space Invaders or Galaxian. Later, they did offer more sought-after titles like Joust, Space Dungeon and Ms. Pac-Man, but by that time the gaming market was on the verge of collapse.
In 1983, between: Atari (with the 5200 and 2600), ColecoVision and Intellivision, the VCS (Video Computer System) market was stuck in a glut due to an oversaturation of product. Consumers were also demanding that their computers perform more functions than just play games. At that point the Commodore 64 and Atari 800XL home computers had just been released.
Even after a slow start, 1983 sales for the 5200 plummeted. Warner Communications (Atari's former parent company) reported second quarter losses of $283.4 million. By the end of the year, Atari had posted losses of $536 million. They ended production of the 5200 in 1984.
The best game titles for the 5200: Berzerk, Missile Command, Centipede, Qix, Pengo, Wizard of Wor, Space Dungeon, Rescue on Fractalas! and Montazuma's Revenge. ~ Dave Beuscher, All Game Guide