I don't always agree with Jim Stirling, but he's spot on about the current state of the "Triple-A" industry.
Atari certainly has an interesting story behind it. From what I've heard, it was a literal coke fueled free for all during the Warner years. Money flowed like water. They were actually giving away $150,000 (in 1982 money!) as part of a contest at one point.
Atari got far too big far too quickly, got cocky, and over-saturated the market. It was a classic bubble. 1982 saw a flood of shovelware titles that overwhelmed consumers and damaged the brand's reputation. Several high profile in house failures eventually pushed them into financial ruin. Warner dumped them and Jack Tramiel bought up what was left.
Nintendo was smart enough to learn from Atari's failures when they launched in North America. That's why you saw a strong focus on quality games, and tight restrictions on third parties. Nintendo of America's internal motto during the 80s was "the name of the game is the game". They understood why people buy video games, and capitalized on that to great success. They were people who were still passionate about gaming, but level headed enough to manage the business effectively.
Atari's later attempts just fell flat. The 7800 wasn't as powerful as the Master System, and it didn't have the games that Nintendo had. The Jaguar was an ill conceived "64-bit" console that was barely better than existing 16-bit offerings. When the PlayStation launched a year later, it blew it out of the water. A lot of those early 5th gen systems died a quick death. The Lynx was okay, but once again Sega and Nintendo had better offerings.
Atari bankrupted themselves again a couple years ago. I think their focus on mobile will ultimately be their next great mistake. That market is due for a correction. Largely because of the same factors that caused the 1983 crash. F2P is not the golden goose that everyone thinks it is.