In 1980, Tandy-RadioShack launched the Color Computer line. While it retained the TRS-80 name, the CoCo was a substantial departure from Tandy's earlier computers. Notably, the Zilog-Z80 processor (for which the TRS-80 was named) was replaced with the Motorola 6809 processor.

The CoCo was aimed at the new low-cost home computer segment featuring color graphics and connecting to a TV rather than a dedicated monitor. Compared to its competitors, the CoCo had a very advanced CPU. However, to offset the CPU cost, dedicated sound- and graphics-hardware we're omitted. This made it difficult for the CoCo to compete in
the gaming market.