Atari LynxLynx was Atari's one attempt at the portable handheld video game market, but it was not their idea at first. They bought the rights to it from Epyx, and released the system in 1989 alongside Nintendo's Game Boy. In most ways, Lynx was superior to the 1989 Game Boy: it had a color screen, better sound, and a higher bit rate. Unfortunately, it was Atari's reputation that brought Lynx by the wayside and gave Game Boy the firm grasp it has today. Actually, Lynx was a much better attempt at marketing and machinery than Atari's last few attempts, and the Lynx remains one of the most popular cult systems today.
But what was Atari's biggest problem? Simple: Game Boy had Tetris, Lynx did not. Every single Game Boy came packaged with this ultra- addicting masterpiece from Russia, and Lynx had no such draw. Sure, it had Q*Bert and some other popular Atari titles of yore. But no Tetris. Seriously, it was all about Tetris. It just goes to show how important games are for a system.
After releasing a smaller Lynx II, they decided it wasn't making the mark they were hoping for, and went to work on their advanced, 32-bit Jaguar system instead. But they did integrate the Jaguar with the Lynx ultimately; they made it possible for Jaugar and Lynx owners to connect the two systems, using Lynx as a Jaguar controller (allowing players to have a private screen in the case of 2+ player strategy games). The idea was never utilized by developers, though, probably due to the overcomplexity of the design.