Atari U.S. operation files for bankruptcy

[claud3]

Atari U.S. operation files for bankruptcy

The U.S. operations of pioneering video game company Atari Inc. is seeking to break free from French parent Atari S.A. and in the next few months find a buyer to take the company private.(Strong National Museum of Play / January 20, 2013)

By Ben FritzJanuary 20, 2013, 9:47 p.m.


The U.S. operations of iconic but long-troubled video game maker Atari have filed for bankruptcy in an effort to break free from their debt-laden French parent.

Atari Inc. and three of its affiliates filed petitions for Chapter 11 reorganization in U.S. Bankruptcy Court in New York late Sunday.
Its leaders hope to break the American business free from French parent Atari S.A. and in the next few months find a buyer to take the company private. They hope to grow a modest business focused on digital and mobile platforms, according to a knowledgeable person not authorized to discuss the matter privately.

Although the 31-year-old brand is still known worldwide for its pioneering role with video games such as "Pong" and "Asteroids," Atari has been mired in financial problems for decades. Since the early 2000s it has been closely tied to French company Infogrames, which changed its name to Atari S.A. in 2003 and in 2008 acquired all the gaming pioneer's American assets.
Chief Executive Jim Wilson has been with Atari Inc. since 2008, and in 2010 became CEO of the French parent. The New York-based executive has

attempted to rebuild the company, which has just 40 employees in the U.S., by developing games for smartphones and the Web based on well-known properties -- among them a successful "greatest hits" compilation of arcade titles and an updated version of "Pong." He has also licensed the Atari logo for consumer products, a business that provides about 17% of the company's revenue.

There is evidence that the U.S. operation, which after the sale of other assets now makes up the bulk of Atari S.A.'s business, has been improving. The corporate parent has been profitable for the last two fiscal years, save for the effect of a money-losing French subsidiary, Eden Games, that has been up for sale. Before that, neither Atari S.A. nor Infogrames had been profitable for about a decade.

Still, its profits have been small ($11 million and $4 million, respectively, for the last two fiscal years) and revenue plummeted 34% in fiscal 2012 and 43% in fiscal 2011.

But the company's growth potential has been hampered by its near total reliance on London financial company BlueBay Asset Management for cash. A $28-million credit facility with BlueBay lapsed Dec. 31, leaving Atari without the resources to release games currently in the works, including a real-money gambling title titled "Atari Casino."

Efforts to recapitalize the corporation have been unsuccessful, in part because of its complex structure as essentially an American business with a French public stock listing.

Shares in Atari S.A. have dropped in value from more than 11 Euros in 2008 to less than 1 Euro recently.

Atari Inc. has secured a commitment for $5.25 million dollars in debtor-in-possession financing to continue operations and release games. If Chapter 11 is successfully completed, the U.S. business could reemerge with its own resources and little or no debt to BlueBay.

It's not yet clear who might step up to buy Atari Inc., although Wilson will probably seek backers to help him keep control. It's also possible the company could be sold to another buyer, whole or in pieces.

Atari's remaining French businesses would probably seek legal protection to find a buyer or dissolve in that country.


Representatives for Atari S.A. and Bluebay did not immediately respond to requests for comment.

http://www.latimes.com/entertainment...,0,25279.story

Even more sad news for the industry


Below more info on this

Atari’s US business files for bankruptcy, aims to live on with digital and mobile gaming focus


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Atari, one of the original names in computer gaming, is filing for Chapter 11 bankruptcy in New York as it moves to separate its US business from the parent operation in France — Atari SA, formerly know as Infogrames – in order to pursue a new focus on digital and mobile games.

The company announced the filing in a press statement which explains that Atari Interactive Inc., the US operations, is seeking approval for $5.25 million in financing from Tenor

Capital Management in order to “minimize any disruption of [its] day-to-day operations”.
The company is selling all (or “substantially all of”) of its assets, which includes its brand logos and a range of games franchises that include Pong, Asteroids, Missile Command, Tempest and more.

“The Chapter 11 process constitutes the most strategic option for Atari’s U.S. operations, as they look to preserve their inherent value and unlock revenue potential unrealized while under the control of Atari SA During this period, the company expects to conduct its normal business operations,” the company’s announcement reads.

Atari’s business has gone digital in recent times as it has moved from a traditional model of games to developing its franchises for mobile and securing licensing deals. The company says that this switch turned Atari Inc. into “a growth engine for Atari S.A” thanks to new

revenue streams from downloads and advertising. Chief Executive Jim Wilson told The Los Angeles Times that revenue accrued from licensing its logo alone brings in 17 percent of the company’s income.

Infogrames completed its buy-out of Atari in October 2008 with a deal worth around $11 million. The company, which had been the majority shareholder, initiated a series of streamlining initiatives which cut general expenses and focused on its US business, distribution and finding new partners.

Atari Interactive has 40 employees in the US but it has suffered from Atari SA’s reliance on London-based BlueBay Asset Management for cash. The LA Times explains that the firm has been crippled financially since its $28 million credit facility with BlueBay lapsed on December 31.

http://thenextweb.com/insider/2013/0...-gaming-focus/

[Thorzilla]

Sad, sad news indeed man. The great have fallen deep down. Hail the so called "mobile" market...

[IranDennis]

screw the mobile market. serially gaming is becoming like american loving kim kardashian culture ......

[Syphon_Filter]

They were a great company with so many games. I don't no what the hell is happening to these companies. Its sad indeed sad. I was hoping for Ghostbusters 2 and its bad for us as gamers.

[claud3]

it just proves that, the mighty are falling fast and we need to wonder what company will be next and will it be a big company

E.A anyone

[Marcsony]

Damn shame i owe a lot of gaming hours to Atari and sad to see em leave.

[claud3]

But why the mobile market, get out while you can and spread around and give your knowledge to others in the industry. Help make some awesome old school gaming live again

Bring back the oldies to the XBL or PSN store, That way we can relive the past and enjoy are childhood once more

[DeviousOne]

Atari has been dead since the Jaguar. I fear Sega may see this same fate one day =(

[claud3]

I do not see this as a THQ situation, i see this as a straight forward chapter 11

The company has had problems like many... But again not on the scale as THQ

THQ's problems are on a different level and has buried themselves on full blown debt, were is Atari have had other major issue's

[Sylar]

it's always disappointing to see iconic names go down :/

[BoyBettaKnow]

Evolve or die.

[Silver_Knight]

Evolve or die.

Pikachu never evolved!

[Blacksite]

Doesn't surprise me, actually. I know Atari developed several home consoles early on but I can't remember the last time they put out a successful video game.

[claud3]

I do not think it's the successful aspect, it's the memories of what it brought to the gaming table back in the day

[Blacksite]

That's not what I was getting at. When Sega bowed out of the hardware market, they continued developing new games. If you asked people what their most successful new IP was, they'd likely answer with Yakuza. At least in Japan. Atari, on the other hand, all people can bring up about them is the past (Pong and the 5200 etc).

[claud3]

I agree, but to me it's the memories and not the success part

Here they are thinking of selling off the Iconic LOGO

Atari Files For Chapter 11, Plans To Sell Off Logo

news

by Jeff Cork on January 21, 2013 at 09:02 AM
5,562 Views

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Atari Inc. has announced that it has filed for Chapter 11 protection as the company attempts to move away from its parent company, France's Atari S.A. As part of the filing, Atari revealed that it is considering the option of selling off assets including the iconic logo and a variety of classic franchises.

The filing says that Atari plans to make such a move within the next 90-120 days. Its options include selling off the logo and franchises that include Pong, Asteroids, Centipede, Missile Command, Tempest, Test Drive, and Backyard Sports.

Atari has been a pioneer in the video game industry in its 40-year history. Founded by Nolan Bushnell, the company released games such as Pong and Breakout, which were

massive successes at bars and fledgling arcades. In recent years it has attempted to cash in on nostalgia, with remakes of Atari 2600 games including Haunted House and Yars Revenge. It has also made a push to break into the app market with virtual recreations of its arcade games.

http://www.gameinformer.com/b/news/a...-off-logo.aspx