(FORTUNE Magazine) – Remember Atari, the Warner Communications division that rocketed to a torrid $323 million in 1982 earnings -- only to lose $539 million a year later when the video game fad collapsed? How about Jack Tramiel, founder of Commodore International Ltd., who savaged competitors in a home computer price war and built his tiny typewriter repair shop into a feared $1.4-billion-a-year giant before quitting abruptly in 1984? Together Tramiel and Atari have bounced back from oblivion. Tramiel put up $25 million to take over Atari's wreckage three years ago. With the help of a small troop of Commodore veterans and his three sons, he chopped staff, dumped outdated inventory, and started hawking a new generation of low-cost computers in the U.S. and abroad. Last year Atari earned a cool $45 million on sales of $258 million. Its prospects looked bright enough to push investors' buttons. They gobbled up the stock at $11.50 a share when Atari went public last November; since then Atari stock has scored points like a video game, more than doubling to a recent price of over $25. The Tramiel family's share: $378 million. Still only one-eighth its former size, Atari aims to be a billion-dollar-a- ye ar company by 1990, says President Sam Tramiel, Jack's oldest son. The company recently introduced a new $150 video game console and a $499 clone of IBM's venerable PC. It also unveiled gear aimed at the burgeoning market for so-called desktop publishing. Atari's package includes a computer, laser printer, and the software needed to compose and produce slick-looking documents; priced at $3,000, it will cost less than market leader Apple Computer charges for a laser printer alone. But large U.S. computer retail chains and all but a few mass merchandisers have shunned Atari's computer offerings; many were wounded by the collapse of the video game business and by Tramiel's cutthroat discounting while he ran Commodore. So far, more than half the company's revenues come from abroad. Atari plans to woo the locals by stoking demand with more than $10 million in television and print advertising this year.