Justin

They had the wrong manager in charge.  When looking at Nintendo (and also Sega to a degree), leadership took a lot of wild chances on game designers.  Pairing an artist with an engineer for example.  I'm not sure Atari would have ever seen the value in this.  They seemed stuck on doing things the same way instead of innovating with game design. 

There were also too many silos at Atari.  Arcade vs home vs computer divisions.  I doubt anyone ever considered putting their properties at a higher level together for collaboration. 

MAD magazine was also under the WB umbrella.  Another wasted opportunity.

We did have one excellent Superman game for 2600, and then.....nothing.