The Atari Jaguar was initially designed by a UK company called Flare, which comprised of a group of developers who left Sinclair Research when Amstrad took over.
Lacking funds, they contacted Atari, who took on the Jaguar project. Atari persuaded Flare to close down, and create a new company, Flare II, with the intention of developing both the 64 bit Jaguar and the 32 bit Panther console. However, lacking funds themselves, Atari canned the Panther project and rushed the underdeveloped and very bugged Jaguar console to the market in December of 1993.
Prior to release, Atari announced a $500 million deal with IBM, in which IBM would produce the Jaguar in its Charlotte, North Carolina, plant, thus ensuring a plentiful supply of consoles for the market, and assuring quality control. Another Atari announcement at around the same time was of a deal allowing access to Time Warner’s extensive video library for Atari products. In the end, neither of these deals bore fruit.
Performance of the machine appeared comparable to that of the 3DO, and being more competitively priced, it outsold the 3DO by some margin. Unfortunately, it came to market at a time when the media and buying public were in a frenzy of excitement about the forthcoming, CD based, Sega Saturn and Sony Playstation… both of which were obviously more powerful machines. So, while initial sales had appeared promising, even with the inclusion of the Jaguar CD add-on in 1994, overall sales were very poor.
By 1995, Atari was falling apart at the seams, no doubt a factor in Sam Tramiel suffering a heart attack. The following year, Atari was bankrupt and the Jaguar was no more.
This is not quite the end of the story, however. In 1999, Hasbro Interactive, who now owned the rights to the Jaguar, officially released the rights to the system into the public domain. This, coupled with the discovery of the Jaguar’s cartridge and CD encryption keys, has enabled an enthusiastic homebrew scene to flourish. On top of this, several unfinished projects have been completed and released by the community, some of which, it has been suggested, could have saved Atari, had they been released before the company folded.
There was, and still is, much disagreement about whether the Jaguar really was the 64 bit machine it was marketed as.
The main graphics processor, Tom, running at 26.5 MHz, contained a 32 bit RISC GPU, a 64 bit object processor and a 64 bit blitter.
Jerry contained a 32 bit RISC DSP, CD and other sound hardware, and the joystick control.
There was also a Motorola 68000 at 13.2MHz, to perform various functions.
The argument, (largely propagated by Atari’s competitors and a disgruntled media who were unhappy with the Jaguar’s performance, after they’d sung it’s praises in the beginning), suggested that none of the chips were truly 64 bit, and only when you added them all up did it amount to a 64 bit system.
Ask any developer who actually worked on the system though, and they will confirm that it was in fact a real 64 bit machine.
Why it failed
The very short answer is “mismanagement, under development, poor development tools for programmers, under funding, a lack of decent software, and poor promotion.”
In Atari’s rush to get the Jaguar to market, since they badly needed the revenue it could bring in, they neglected to fix numerous bugs in the hardware. The worst of these was a memory controller flaw that could stall the CPU.
The controller was also very unpopular with games players, being a cumbersome lump of unresponsive plastic, and having a numeric keypad, which while a good idea in theory, proved far too clumsy to make good use of.
Hardware was not the only thing that had been underdeveloped though, as software development tools for programmers were woefully inadequate. So despite the system being actually a lot more powerful than it actually appeared in the early years, with very little knowledge of such a new system’s strengths, programmers found it incredibly hard to produce impressive results.
The truth is, though never on a par with the Playstation in terms of graphical ability, if programmed correctly, using assembly language, the Jaguar actually had more flexibility and could pull off tricks with AI and physics that the Sony machine could never do. Sadly, such abilities were never fully explored until long after the machine had been discontinued.
Supply, or rather, management of that supply, was a huge problem, most notably for Atari in the UK. While the system gained little interest in the USA, the vast majority of its stock was distributed there. This left Atari’s UK offices fielding hundreds of calls from disgruntled retailers, who had thousands of customers screaming out for the console, with none to be found on the shelves at all. So, while the US had consoles that wouldn't sell, UK buyers wanted them, but couldn’t get them. An obvious recipe for disaster.
From a fairly early stage, the games development community, (and everyone apart from the Tramiels, it would seem), could see that the Jaguar was doomed to fail. So naturally, very few games were produced, and even fewer good ones. Software sells hardware. The final result was inevitable.