NES didn't come out until the tail end of 1985 in NYC and 1986 in the rest of the country. Since no new Atari games we're even released by anyone in 1985 (with 2 minor Activision games as the only exception) your claim seems dubious to me. There may have not been a drop in sales numbers from the retailers (who were still burning through the glut of old stock by selling at a loss) but at that point I can't imagine that anybody was still making money up until the NES came out.