The Atomiswave was not actually made by SNK, nor did they make great sequels for it from IPs that would be worthwhile other than Slug 6 as they can't remember what the hell was great on the Neo-Geo, and even Slug 6 had no red blood or slyle, so real fans gave not two shits for it. They did not port anything from the Atomiswave to a system that their fans would buy the games the most on ala the Neo-Geo, and they did not really give it much time to even latch on to many people due to lack of patience.
The biggest issues with SNK are what I stated above, and Arcade's might be dead to many but certainly not to all as it's doing great in many asian countries, and Arcade style games are still selling quite well, otherwise games like the Street Fighter series (fighters in general), and games that are known as "bullet hell" shooters are still going strong. Yes, for us in the US and those in Japan, the Arcade scene is gone now, but I am sure there are still many that loved them, that buy them and make their own arcade rooms, and it's this type of thought that lets you know that if they were to make Arcade style games, they would still sell. Not just in Arcades, but the ports would be selling nice if the games are good enough.
Yes, it would take serious time for their system to pick up, and even if it did not sell as well as a PlayStation per se, they should be able to survive quite nicely on ports. However, their damn games would have to be really good, which is why I cannot emphasize enough that SNK would have to be very patient, and make games that people everywhere would buy taken from their absolute best past IP's, even if they were games that are just $14.99 on PS3/PS4 in the end. Their real games would be selling on the Neo-Geo and NG2 by their most loyal fans. It can be done, sadly it's people that haven't any faith in Arcade games in general that killed off arcades in general. Like I said though, this is just my two cents.