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There are many reasons, but one reason is that while the PC catered to the business segment, gaming consoles were on the rise in the early nineties. Multimedia computers simply failed to compete in either market and fueled by large sales in the 1980's Commodore and Atari had very ambitious and costly development projects.

Also, the advent of 3D gaming proved difficult for the Amiga and Atari computers. While PCs had chunky bitmaps that made texture mapping easier, the bitplane design graphic subsystems made it much harder to program 3D games. PCs also had an edge with raw processing power required for geometry processing.

Take it as a lesson, success is an ongoing process, and markets change rapidly.

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Q: Why did Commodore Amiga and Atari go bankrupt while PC's were so boring in comparison?
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