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And then there was...COLOR - the 'Lynx'

Back in 1987 the quite well known software-company called 'Epyx' ('Summer Games', 'Winter Games', etc.) wanted to make it to the hardware-sector. With experienced developers (e.g. R.J. Mical and Dave Needle, who also were involved in the development of the  Commodore 'Amiga') they created a handheld machine with color graphics and powerful hardware-capabilities. They called their system 'Handy'.
But they didn't have enough funds to finish the project.
Atari got to know about this and decided to buy all rights to the 'Lynx' and to the whole library of software titles from 'Epyx'.
But delivery-problems prevented the 'Lynx' from becoming a big success, though out-performing other systems like the 'Gameboy'. But having pushed the 'Gameboy' heavily, Nintendo began to rule the market.
The 'Lynx' was quite big and so Atari decided to design an improved version that was lighter and had a lower power consumption: the 'Lynx II'. It also featured a stereo-headphone-jack (the original 'Lynx' only offered mono-sound).

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