I don't buy into the idea people didn't know about the 7800 here in the US. It was in the Sears catalogs. It was prominently carried in Toys R Us and Kay Bee. Atari Corp did advertise it on television albeit not as much as Nintendo with the NES.
Hate to say it, but I think I was one of those that was unaware of the 7800… until I sold them at Montgomery Wards in the very early 90's!
Trying hard to recollect any memories or even a vague general awareness of the system in the 80's, but can't. During my high school years (85-89), wasn't reading Sears catalogs or doing much shopping if at all, at the toy stores. High school years were spent playing sports outside with my friends, playing computer games (TI, C64 & Amiga primarily), working and dating. The 2600 was relegated to the closet and the only other console I had back then was an NES when it *first* came out and the few games I had, were all bought at the same place - Highland Superstores, with no 7800's in sight. Traded my NES ROB system for a complete C64 system very soon after, so didn't get a chance to shop at TRU all throughout the 80's for NES games, which is where you'd think I would have seen 7800 stuff. Wasn't shopping at Kay*Bee any longer either since the 2600 was stuffed in the closet and I had "moved on" so to speak. So there you have it… the reason why even a "gamer" like myself BITD, could have accidentally skated around the 7800 for so long.
When I first saw the 7800 at Montgomery Ward (90-91), thought it was kinda cool (not enough to purchase though - ha!), but thought it was kinda funny that it was yet another Atari machine that was *still* 2600 compatible. Shortly after, acquired another NES, shopped at TRU and the like, saw the XEGS… but NOT the 7800 in any store other than the Montgomery Ward I worked at. We had a very small selection of games too that we kept locked behind glass with the NES, Lynx, Genesis and TG-16 games. Rare was the day we actually sold any 7800's then, but they either eventually did all sell or were sent back to wherever. Galaga was definitely the reason people were buying systems too btw, pretty much a 1:1 ratio.
Believe the system was $70 and games were between $20-$30ea. back then. So for about $100, you could have an Atari system with enhanced graphics, was backwards compatible with the 2600 AND played one of the greatest arcade games ever released! TG-16 with Galaga '90 would have been about $250, but *that* system couldn't play 2600 games. I'm poking fun of course. None of us were *that* excited about selling the 7800 back then.
Still trying to remember the system being sold *anywhere* else, but can't. By '90-'91, I brought the 2600 out of retirement and was purchasing some of the mid to late 80's stuff I had missed out on; like Ghostbusters, Solaris, Jr. Pac-Man and Midnight Magic. The places I was seeing these games heavily discounted were at music/video stores in the malls. Remember seeing small bulk stacks of the Atari red box titles, Activision and Absolute titles, but again - no 7800 games or systems! Would also frequent Child World and TRU during this time and for the life of me, do not recall seeing any 7800 stuff. Guess I was either totally blind to it for whatever reason (doubtful) or simply wasn't around in numbers for me to notice.