alternatehistory.com

Ralph Baer met with the newly-hired Jerry Lawson. Much was said about the home arcade industry during that meeting, but what ultimately came out of the meeting was that Baer was looking to retire his position as the leading engineer of RCA's gaming division and give it to Lawson. Baer had admired Lawson's Channel F's ROM cartridges, calling it "the next step" for the industry, and he had been planning to retire from RCA since he wanted to work of more things. Indeed, he co-developed a light-up memory game named Simon and distributed it through Milton Bradley. Lawson was set to lead the development of the RCA Studio 2.

The Studio 2 launched in the early winter of 1978, just in time for the holiday season. Unlike the Studio (often referred to as the Studio 1), the woodgrain was swapped for silver-colored plastic. It came with two hard-wired joysticks and a keyboard on the central unit. The keyboard was used for educational games and programming software, albeit it uses a dome-switch keyboard unlike the membrane keyboard in OTL's Odyssey². The system was initially bundled with a cartridge containing three games - a one-player racing game, a two-player racing game, and a game involving alphabet ciphers. The Studio 2 and the VCS went toe-to-toe during the Christmas of '78, with no clear sign of a leader yet.