The gaming industry in the early 80's gets seriously overshadowed by the Atari 2600 even though that was not the best system available at the time. Through a combination of marketing, tons of games (some would say too many), and finding the correct price point Atari was able to dominate the market even though Colecovision was a better machine. There were also a number of other systems that came out during Atari's reign that we never even got to hear about. This Vecktrex system was one of them. As a video game devotee I had no idea it existed until discovering it unused at a friends house in 1990.
src
The Vectrex didn't look like much but in so many ways it was vastly superior to the Atari 2600 or really anything else that existed at the time. Something that was meant to be a selling point but I believe actually worked against them was the fact that the system was never meant to be hooked up to a television and was itself a standard sized screen and the hardware was contained inside. The screen was monochrome as well so that probably doesn't sound great so far but there was a very good reason for it.
src
Vectrex games came with these color films that would serve as overlays to the screen that game the illusion of a color game even though it was only in green in white on the actual screen. So I suppose this was a bit troublesome because you had to hang onto some delicate film as well as a cartridge.
When we look at games of the distant past, color wasn't really the important part of it so much as gameplay and when it came to vector-oriented games such as the wildly popular Berzerk looked much better on the Vectrex than it did on Atari.
Now the controller was something that was really special because look at that thing compared to the Atari or even the NES that would come out 3 years later. Having 4 buttons in 1982? There weren't even any arcade games with 4 buttons that I am aware of. That type of forward thinking is very appealing to me as there wouldn't be a mainstream home-console that featured a controller with 4 or more buttons for nearly a decade after this was released.
The Vectrex also had the ability to draw directly on the screen using a light pen (and it actually worked) and there were also 3D glasses which I never tried but will go ahead and presume they were pretty amazing at the time but would probably cause blindness today just like Virtual Boy did.
src
Although the above image is obviously a hacked system (PS controller) but the imagery is evident. If you are at all familiar with Atari games you can attest to the fact that this just had a better feel to it.
I don't know exactly why the Vektrex failed but I suspect the small screen kind of interfered with people being interested in it as a "family system" and hardcore gamers the likes of which we imagine today was a very small niche market in 1982.
They tried, but most people didn't even know it existed
Despite a low price point of $200 that was at one point reduced to as little as $50 for the console, Atari had already captured almost the entire market share and they weren't going to allow the little guys to have any of it. Vectrex has a cult status these days and simply getting a genuine controller will cost more than $100 these day (unopened and certified new will cost you more than a thousand.) But this little system is likely only in the possession of true collectors like AVGN and the like.
It's a nice little piece of history that i am glad I randomly encountered in my friend's closet one day. To be fair, even though it was pretty amazing, we quickly went back to playing Nintendo (which existed at the time when I discovered the Vectrex) and the NES was a much better machine.