Mattel began development of the Intellivision in 1977, the same year Atari released the 2600. The Intellivision eventually got a full North American release in 1980.

With superior graphics and sound, the Intellivision was the first system to pose a serious threat to the 2600. It had a few years of success but was ultimately another victim of the video game crash of 1983.

Following a series of layoffs which began in mid 1983, Mattel sold off its video game assets in early 1984. The new owner continued to publish a small number of games until the system was discontinued in 1990.