That's alright. When it came to Jack Tramiel, there was never much in the way of "sense" involved.
I reiterate: The Tramiels didn't want to be in the game market, period. They wanted to just get rid of the 7800's taking up inventory space. The XEGS was just a knee-jerk way for them to try and make quick cash in on the market resurgence made possible by the introduction of the NES.
{reprinted from Atari7800.com}
"...the Tramiels were not impressed with the 7800 ProSystem, or anything else the gaming end of Atari had to show them.
The following is a quote from Curt Vendel of the Atari Historical Society: "When Atari was sold to the Tramiels in 1984, the last the thing the Tramiels had on their minds was selling video games. They wanted the Atari name for selling their new computer which they put all their effort into. The Atari 7800 was shelved. Then Nintendo approached Atari back in 1983 to license and sell their Famicom system under the Atari name since Nintendo didn't feel it could compete against the once mighty video game giant. Nintendo was told that Atari was not interested in their 6502 CPU based video game system, also according to Michele Ebertin, former manager of Atari's Consumer Electronics Division "marketing just didn't like the idea of a game system with a controller that didn't have a joystick on it, they hated the Nintendo controllers." Nintendo decided that they would sell their Famicom in the U.S. and called it The "Nintendo Entertainment System" and it was an instant selling success. Atari Corp, seeing the sudden resurgence in the video game market decided it was time to pull the finished 2600jr that Atari, Inc under Warner Comm. had developed in 1983 out of mothballs and take the Atari 7800's which were also completed and sitting around for more then 2 years off the shelf and sell them in 1986. Well, it was too little, too late. Nintendo had the market; lock, stock and barrel. Not to mention Sega with its Master System was also hot in Nintendo's tail, Atari was running third in a race it used to run a far lead in first in the past."...
The Atari 7800 ProSystem was dead on arrival at the toy stores. "We only received one shipment of the 7800 in 1984 and that was it! We didn't get anything for nearly 2 years after that from Atari as far as the 7800 was concerned." says Lance Ringquist of Video 61. What had basically happened here was a case of child abuse. The Tramiels neglected the brainchild of Atari as soon as they had purchased the company. They let this advanced system sit on the shelves for over two years, and the once advanced system had technology that was starting to age.
When the 7800 ProSystem was eventually released in 1986 by Atari under Tramiel control, the once promising system came out the door limping. The Tramiels were a nasty, dank, greedy, and most of all, stingy family who treated Atari like their own personal bank account. They never put any money or thought into anything they did. The first thing they did to the 7800 ProSystem was cancel all the existing add-on technology from the 7800 ProSystem lineup. First to go was the ProLine Keyboard, followed by the High Score Cartridge. These promising accessories were not to be. It truly was such a waste. The nail in the coffin on all of this was the cut of the expansion port on the 7800 units. The expansion port which had been built into the first 5000 units was cut from further production, limiting the 7800 to its self contained technology, and again cutting all possibility of a LaserDisc add on."