The story of its creators, Epyx, is a sad one though. Epyx was traditionally a software company, not hardware, having released hit games like "California Games". They signed a deal with Atari that basically gave Atari the rights to delay releases of Epyx software for any QA issues Atari found.
Atari was being run by Commodore founder Jack Tramiel at this point, and he was known for his shady business practices. Atari abused this part of the contract with Epyx, forcing Epyx to delay their software releases until the company was bled dry. And then Atari took what was left of Epyx for a bargain, including ownership of what would become the Atari Lynx (originally the "Handy"):
Facing financial difficulties, Epyx sought out partners. Nintendo, Sega, and other companies declined, but Atari Corp. and Epyx eventually agreed that Atari Corp. would handle production and marketing, while Epyx would handle software development. Epyx declared bankruptcy by the end of the year, and Atari essentially owned the entire project
https://en.wikipedia.org/wiki/Atari_Lynx#History
I am glad that Atari imploded a few years later. Good riddance.
Sega also ended up lifting a lot of the Lynx's design for the Game Gear after the Handy was pitched to them by Epyx.
There is also an amusing story about how Epyx's pitch to Nintendo of Japan went terribly wrong, though I can't find it now.