Wholeheartedly recommended:

(I saw it on netflix; it's actually easier to find the whole movie on the Internet than it is to find the trailer)

Hidden in that documentary (which doesn't blame ET, btw) is the fact that Atari's sales were largely driven by consoles; by 1982 everyone who wanted a 2600 had one. Meanwhile, the only games you could get for the 5200 were ports of 2600 games.

It's interesting how the modern perspective is that video games "died" in '82, when in fact there was just a three-year lull while next-gen systems (NES and Sega) came out. Atari outcompeted Coleco and Intellivision and then handled their monopoly poorly, but Nintendo did pretty well (until the Wii U, anyway).

"Can it happen again?" I think it's fair to say that the prolonged life cycle between Xbox and PS generations says a lot about the lessons learned.