Well, Atari in fact a lot of a ton of competition in their best era, but the market back then was very different

-copyright and plagiarism over video games had not yet been implemented very well, so stealing ideas and making bootlegs was a thing that even big companies could do with no much worries
-Any idiot with a computer could make their game published by silmply mailing it to distributors (quality control was also very weak)
-Graphic differences between consoles were very subtle and complicated to explain, and PC’s were still vey unstable and expensive
-In the 70’s-80’s could get away with a bunch of shaddy shit all together

Atari did better because their company already had experience in the market, and not just in development, they knew how to promote it, how to distribute it and how to make it affordable for the general public and how to treat the customer as people.

Also, the things on the image happened after the crash, when most of the people who knew what they were doing already hadleft the company and Atari started being bought and sold several times by giant american monopoly companies who in the 80 and late 90 were notorious for being terrible, powerhungry and egotistic. Atari still continued to make quality products for decades, the new bosses and their tactics are the ones who should take the blame for killing it.

In short, the only reason the Atari consoles were successful was because there was nobody to compete with them. Then Nintendo and SEGA rolled along and blew them into obscurity and by the time Sony entered the console wars, they were a passing memory at this point.