The 7800 had exactly one good game. What went wrong? It had some serious potential.
Nah, there are a couple others.
Dark Chambers
Desert Falcon
Food Fight
Midnight Mutants
Ninja Golf
Scrapyard Dog
>what went wrong?
The console was okay, the Master System had a much rougher start for example. But it was irrelevant because Atari was synonymous with failure and the NES already conquered America. Because of Nintendo's policy that required their system have unique games meant it was not ever the top choice for ports.
The $79 pricetag didn't really matter in America where budget consoles weren't a thing but dragged their feet from releasing it in Europe, until practically Sega Megadrive came out. Atari had no fucking idea what they were doing.