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In 1983 and 1984 the roots of future Japanese strength were emerging. Nintendo was just starting to gain strength as a gaming developer. It quietly developed its Mario Brothers game for various Atari platforms such as the 2600. Sega too was in its beginnings as a 3rd party software developer. Even Konami was present in the market as a developer for the 2600 with at least one game. When the video game market crashed Atari was split into basically a home console division (Atari Corporation) and a arcade gaming divison (Atari Games Corp). The division of the company into two separate companies ever how closely they allied themselves produced a tremendous problem for Atari from a home console video gaming system point of view. The latest Atari Games Corp hits would no longer be exclusively released for only Atari based gaming systems.

Nintendo developed a cutting edge gaming system known as the famicom in Japan and the Nintendo Entertainment System (NES) in the US. Originally Nintendo modernized their Atari 2600 hit title Mario Brothers which was released as the Super Mario Brothers coin operated video game. This title was developed into a working title for their NES; with one good title and excellent technology all the various Japanese software developers that were insignificant just a few years earlier began to sign on as licensed third party developers for the NES. Sega eventually released its own gaming system referred to as the Sega Master System.

Atari Corporation attempted to reenter the home console market with the Atari 7800. The system proved a failure. The technology was not all that different than the NES or Sega Master system. The NES had a tremendous number of third party developers creating amazimg new software titles for its machines. Sega while not possesing such licensed third party strength did have an arcade presence and with a direct porting over of their arcade hits such as Hang on they had viablity as far as a reliable stream of quality software titles and concepts. Atari Corporation on the other hand had few third party developers making games for its systems, as most that had made games for its systems in the past were now out of business. Namco however continued to support them via licensing game rights but this was not enough. Without a presence in the video arcades or reliable third pary developers for its systems Atari's 7800 system failed. If Atari had remained a single unit as opposed to being split into Atari Corporation (home console developer) and Atari Games Corp (arcade game division) then things would have been far different.

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