In the portable console wars of the late '80s and early '90s, Atari's Lynx looked like a serious contender.

You only had to glance at its screen to see the difference: where Nintendo's rival Game Boy had a small display with tiny characters moving blurrily against a yellow background, the Lynx's was huge and backlit. The screen was capable of displaying thousands of colors. The powerful 16-bit processor could handle the kind of home console-beating games that Nintendo's handheld could only dream of.

The Game Boy was the first on the scene, launching in April 1989 in Japan. But the Lynx was the world's first color handheld console, and contained all kinds of ideas that were way ahead of their time—including the ability to have 18 players link up for multiplayer gaming. The Game Boy's Link Cable, by contrast, could connect up to four players.

Yet the Lynx, which could have carved out its own niche in a market only just coming into its own, found itself utterly crushed by the Game Boy, and its production would last only five years. So what went wrong?

The Lynx began life at a company called Epyx in 1986. The masterminds behind the system were RJ Mical and Dave Needle, who'd designed the highly successful Amiga computer for Commodore. At the behest of David Morse, another former Commodore employee now at Epyx, Mical and Needle began working on the design of a console that could be played just about anywhere; at the time, it was a relatively untapped market, with most portable games limited to simple LCD devices like Nintendo's Game & Watch.

By the middle of the 1980s, however, computer technology had reached the point where relatively sophisticated processing power could fit into a portable unit, and thus work on something called the Handy Project began. By the standards of the time, its technical specifications were ambitious; its 65SC02 processor was similar to the one found in such machines as NEC's Japan-only PC Engine, which meant its power was close to that of a home console. The Handy's sprite-scaling capabilities also meant it could theoretically be capable of running fast, pseudo-3D arcade hits like OutRun, Space Harrier or Afterburner.

But in 1989, the project hit a serious road bump: Epyx was facing financial problems by the end of 1989, and couldn't afford to proceed with the console by itself. After a brief hunt around for potential buyers—including Nintendo—the Handy finally found a home at Atari Corp, where the system was rechristened the Lynx, and certain aspects of its design were changed—not all of them for the better.

Nevertheless, the Lynx got off to a good start in the US, where it managed to sell 50,000 units in its first month. Even looking back from a modern vantage point, it isn't hard to see the Lynx's appeal: flying game Blue Lightning really did look like a miniature arcade machine, with fighter jets hurtling in and out of the screen. Atari's backing also meant that the Lynx could play host to some of the company's biggest hits, including Paperboy, Gauntlet, Ms Pac-Man and Rampage—which again looked remarkably like their full-sized arcade rivals.

There were a few things that the Lynx sorely lacked in the face of the Game Boy, however. Number one, Atari's handheld didn't have a 'killer app' like the Game Boy's Tetris—a title that arguably helped Nintendo move millions of systems in those vital early months. Nor did the Lynx have the portability and battery life; where the Game Boy was relatively compact and could make four batteries last between 10 and 30 hours, the Lynx could drain six batteries in just four or five hours.

Add to this the huge cost of a Lynx compared to a Game Boy—$189.95 for a Lynx versus $89.95 for a Game Boy—and you can see why the Lynx would have struggled in the face of its simpler, cheaper rival.

But comparing prices and technical specifications only tells a part of the story. Indeed, it was the Lynx's color screen that set it apart from the Game Boy, and poor battery life or not, Atari's console would have almost certainly sank had it carried a monochrome display like Nintendo's machine. Nor was the Lynx's bulkier size necessarily a barrier to its success; in an interview with 1UP.com, RJ Mical recalls that focus groups actually insisted that they preferred a larger console to a more compact, portable one.

"Make it big. Make it big. This one feels like it's substantial and I'm really getting my money's worth," the testers told Mical.

No, the bigger problem for the Lynx was its marketing. By the late '80s, Nintendo was already dominating the home console market in the US thanks to the NES, and could guarantee the kind of store presence that Atari Corp, still weakened by its collapse earlier in the decade, simply couldn't replicate. A lack of third-party developer support meant that the Lynx would enjoy a tiny library of games when compared to the Game Boy.

Then, in 1991, along came another rival: Sega's Game Gear. Like the Lynx, it was a color console, but it too had Sega's deep pockets to help market it. The Game Gear didn't sell as well as the Game Boy, but it put further pressure on Atari; Nintendo dominated the cheap end of the market, while gamers looking for a color console were more likely to opt for the more competitively priced Game Gear than the Lynx.

A redesigned Lynx II, with a smaller case and better battery life, launched in 1991, but sales only enjoyed a modest uptick. Better support from Atari might have seen the Lynx enjoy a longer life, but the company's interest in the handheld market dwindled as it turned its attention instead to the development of the ill-fated Jaguar home console.

An obscure system though it is, the Atari Lynx remains a landmark. Such ideas as a rotating screen, which allowed left or right-handed players to use the system with ease, and its 18-player link-up option, were ingenious. The Game Boy may have dominated the first handheld console war, but it was the Lynx that first tried to bring full-color, multiplayer gaming to the masses.

Images: Evan Amos, ThePViana, Atari. This post originally appeared on our UK site.