Released October 1987 for $199.00 It was the 1980's, and the Atari 7800 release fails to attract attention in a market dominated by the Nintendo N.E.S. So the folks at Atari came to a decision to market another system. Oddly enough it was a step back in time.
Atari introduced the XE Game System in 1987. The XEGS was merely a console remake of their 8-bit Atari 65XE computer. For $199 you got the console, a standard joystick, a light gun, and a pack in game called Bug Hunt (light gun game).
The marketing strategy was to take advantage of the back stock of Atari computer cartridges (10 years worth). Some Atari 5200 games were also remade since the architecture was quite similar.
Even though it looks like a console, the XEGS is a true 8-bit Atari computer system. It offered the convenience of a detachable keyboard, compatibility with any standard Atari 8-bit computer peripherals, while offering 64K RAM. When no cartridge was inserted it would also start up with a built-in version of Missile Command.
Of course the XEGS could not compete with the likes of newer systems and Atari pulled it from production after a short time.