The Atari XE Video Game System (Atari XEGS) is a home video game console released by Atari Corporation in 1987. Based on the Atari 65XE computer, the XEGS is compatible with the existing Atari 8-bit computer software library. Additionally, it is able to operate as either a stand alone console or full computer with the addition of its specially designed keyboard. In computer mode, it may utilize the majority of peripherals released for Atari's 8-bit computer line. Atari packaged the XEGS as a basic set consisting of only the console and joystick, and as a deluxe set consisting of the console, keyboard, joystick and light gun.
Under the auspices of Jack Tramiel, Atari re-released two game consoles in 1986: the Atari 7800, which had previously been released in a brief test run in 1984; and the Atari 2600 Jr., an updated version of the Atari VCS/2600. The XEGS followed, building on Atari's 8-bit computer line which had started with the Atari 400 and 800. In practice the XEGS is essentially a repackaged Atari 65XE, in a move not unlike that taken for the Atari 5200, which is effectively a repackaged Atari 400/800 computer. However, unlike the 5200, the XEGS is still compatible with the existing range of Atari 8-bit computer software and peripherals, and thus could function as a home computer.
Atari conceived the console in a plan to increase the company's console market share while improving sales of its 8-bit home computer family. Providing a "beginning computer" and "sophisticated game console" in one device, was thought to convince more retailers and software developers to support the platform. In May 1987, Atari's then Director of Communications, Neil Harris, updated the online Atari community by outlining this plan. It noted that the XEGS was intended to further the 8-bit line by providing mass-merchants with a device that was more appealing to their markets. Popular home computer games from the early 1980s such as Archon: The Light and the Dark, Lode Runner, and David's Midnight Magic made up much of the XEGS catalog.
The system co-existed with the Atari 2600 Jr. and Atari 7800 on store shelves and was occasionally featured alongside those systems in Atari print ads and television commercials. It was eventually followed by the Atari Lynx handheld system and the Atari Jaguar.
The XEGS shipped with the Atari 8-bit version of Missile Command built in,Flight Simulator II bundled with the keyboard component, and Bug Hunt which is compatible with the light gun. As the XEGS is compatible with the earlier 8-bit software, many games released under the XEGS banner were simply older games rebadged. This was done to the extent that some games were shipped in the old Atari 400/800 packaging, bearing only a new sticker to indicate that they were also compatible with the XEGS.
The XEGS was released in a basic set and a deluxe set. The basic set includes only the console and a grey colored standard CX-40 joystick. The deluxe set consists of the console, the CX-40 joystick, a keyboard which enables home computer functionality, and the XG-1 light gun. The keyboard and light gun peripherals were also released separately. This is the first light gun produced by Atari, and it is also compatible with the Atari 7800 and Atari 2600.
In addition, the XEGS can use the standard Atari 8-bit peripherals, allowing the use of devices such as disk drives, modems and printers.
^Herman, Leonard; Horwitz, Jer last3=Kent; Miller, Skyler. "Video Games Are Back 1985-1988". The History of Video Games. GameSpot. Archived from the original on November 18, 2012. Retrieved March 16, 2014.|first3= missing |last3= in Authors list (help)