I actually had a thread that was similar to this (though Atari wasn't resurgent), but it seems that you beat me to the punch on a concept I'd given up on. Consider me subscribed, Thande.
Now for some questions (if you can answer them):
-Gunpei Yokoi, the man behind the Nintendo GameBoy, Metroid, Fire Emblem, and the like, has obviously had (or will have) his death butterflied away in 1997 and likely his humiliation in the form of the Nintendo VirtualBoy. Any big plans for Yokoi-san?
-What's Rareware's future going to be like in this TL? Still a third party developer or will Nintendo buy them just like OTL?
-Can we expect any of the 'Big Three' (Nintendo, Atari, or Sega) to snap up any third party developers that they didn't in OTL? Atari sorely needs some first party developers of their own if they still plan to continue on as a console manufacturer up until the present day.
-The Sony-Nintendo agreement is going to have some far-reaching consequences, isn't it? A far more powerful opponent in Nintendo than in OTL, I'm sure, for Sega.
-Will you discuss the future of online gaming (if it happens) in this TL?