Released just two months after the Nintendo Game Boy, the Atari Lynx had all the makings of a clear winner in the portable console wars of the late 80s before it even began: a more efficient yet still familiar CPU; a backlit, colour display being driven by a 16-bit graphics chip capable of blitting and an extensive array of hardware manipulation; four channel, stereo, digital sound support; and support for up to 16-player gaming through link hardware. On paper, it left Nintendo's offerings for dead.
Unfortunately for Atari, Nintendo had three rather significant counter points in its favour: the Game Boy's launch price was only half that of the Lynx, Nintendo was able to focus on more than one device at a time, and they knew how to run advertising campaigns. Despite its clear shortcomings this meant that the Game Boy would go on to enjoy far more success simply by virtue of market penetration, rather than any actual merits.
Towards the end of the Lynx's lifetime a second model - known as the Lynx II - was released. This version, like modern "slim" consoles, was aimed to reduce costs and power usage, thus improving battery life. But it would prove to be too little too late as Atari would very shortly afterwards shift their focus entirely to the ill-fated Jaguar. This single-minded approach ultimately heralded the end of the Lynx, and of Atari itself as a hardware company when the Jaguar failed to compete with the PlayStation and Saturn.