Atari Q2 losses widen on 'uncertainty'

[UPDATE] Publisher announces revenues down across the board, admits that it has "substantial doubt" about its ability to carry on.

Last week Atari CEO David Pierce resigned after just over a year on the job, with his post being temporarily filled by the company's chief restructuring officer Curtis G. Solsvig III. The resignation came the week after the company announced its long-delayed financial results for its first fiscal quarter, which ended June 30, 2007. Those figures painted a bleak picture of the once-iconic publisher's future.

The company also announced its plans in North America to withdraw from the production business, and its plans to license the Test Drive series to parent company Infogrames in exchange for a $5 million advance on royalties. The statement from Atari also indicated that it has "regained compliance with Nasdaq's periodic reporting requirements."

Today the second-quarter results for Atari are in, showing that net revenue for the period between July 30 and September 30 was $13.3 million compared to $28.6 million in the same period last year. Publishing net revenue was $11.4 million, versus $23.1 million last year, and distribution revenue was $1.9 million compared to $5.5 million the prior year. The net loss for the second quarter was $7.7 million, or 57 cents a share.

[UPDATE] As if the faltering numbers were not bad enough, Atari has admitted in a SEC filing that its road ahead is less than certain. The report explains that although the company has relied on Infogrames for loans and purchases of assets, the parent company has its own financial needs, and as a result may be unable to continue to help.

Atari has also sold off development studios including Shiny and Reflections, along with the rights to the Driver series and other IP. This reduction in development has led to fewer games being published.

The filing reads, "The uncertainty caused by these above conditions raises substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty."

The report reiterates that the company is continuing to explore options to improve its financial position and secure other sources of funding. The statement reads, "We continue to examine the reduction of working capital requirements to further conserve cash and may need to take additional actions in the near-term, which may include additional personnel reductions and suspension of certain development projects during fiscal 2008."

Got a news tip or want to contact us directly? Email news@gamespot.com

Did you enjoy this article?

Sign In to Upvote

93 comments
tron563
tron563

if they keep losing money like this they will never release alone in the dark due to its finacial problems they facing i hope they just release their final game alone in the dark and then they can jus close it down thats all i care but if they closed the company down it will be a sad news for the gamers if this happen.

rpgisforme
rpgisforme

I really hope they still get to put out alone in the dark. I have been waiting a long time for that one, will be an awesome game, all of the alone in the darks are.

arc_salvo
arc_salvo

Well, can't say that this is a big surprise. The company that calls itself "Atari" (which is really just Infogrames) hasn't been making very many good games lately. The Driver series is okay, but just okay isn't enough to turn a profit in this day and age, when development costs are so high. And the way they shafted Obsidian and forced them to release Neverwinter Nights 2 -way- too early was totally uncool.

Zell_Forever
Zell_Forever

Would be sad to see them go, after so many wonderful games all these years.. :(

Zerosumgame
Zerosumgame

It is hard to make money for the next little while since the economy is about to go into a serious recession, perhaps you might be able to take refuge in the foreign market.

goobyman
goobyman

They've survived once before... can they do it again??!! Probably not... make something decent atari... something wholesomely delicious and exciting...

nikolokolus
nikolokolus

"Kravyn81 Someone should start a countdown until Atari posts chapter 11" Chapter 11? IIRC Atari has already been through chapter 11, which is essentially a chance for them to restructure their debt; they're looking into the maw of oblivion here.

indyano
indyano

How come they didn't mention anything about Alon In The Dark!!!!???

enoslives7
enoslives7

Atari is a disaster, years of bad karma have come full circle. Their name alone is tainted. Check out the book "Zap" for their full history.

tjdeep_2007
tjdeep_2007

this is the second time.......atari facing such problems......first when they launched extra terrestrail for atari2600..................................atari's game is over

Kravyn81
Kravyn81

Someone should start a countdown until Atari posts chapter 11 :D

N15PCA
N15PCA

After this is all said and done their are only two questions left. Is any other company going to buy the Atari name. I think someone will. Who's going to get the DBZ video game License.

mykel77
mykel77

finish alone in the dark and then close up, thats all i care about

Pete5506
Pete5506

Dang they keep losing money

DrKill09
DrKill09

Please die, Infogrames. You are NOT Atari, quit pretending to be. @Karnov This is not really "Atari." It is a French company called Infogrames. A few years ago, they purchased the Atari name and logo, but they are not the Atari we know (as in 2600, 5200, 7800, and Jaguar)

KarthikKane
KarthikKane

Indigo Prophecy belongs to Quantic Dreams.

lamprey263
lamprey263

Well, I'm not so sad since Atari never actually made any of the games that I like, they just published it. So someone else can publish the next Marc Ecko's Getting Up or the next Indigo Prophecy (AKA "Fahrenheit")... well actually, that all depends on who owns the IP. It should be interesting to see who buys what IP assets.

hobotech64
hobotech64

The Colecovision was a better system anyway.

matt_dangelo
matt_dangelo

well its their fault, they havent made any good games

Devvy01
Devvy01

poor ole atari, just can't seem to crack it.

rm_fc
rm_fc

atleast release alone in the dark before you die !!

-SlipSkull-
-SlipSkull-

There hasn't been any great games by Atari in a long time. I won't miss them when they're gone.

LuminosityBlaze
LuminosityBlaze

Why is it that everyother game maker seems to be seeing record sales and revenue numbers, yet Atari is about to die? They need to make a really cheap, but fun and popular game. You know, like those low-budget indie films, that are really good still. That would give at least something to work with, since it seems they would be starting from scratch, having lost most of their IPs. Any other IPs they may still have, like PONG are useless now, as I was probably one of 1000 people that thought the PONG revamp on PSX was cool (and incredibly difficult).

Cobra_nVidia
Cobra_nVidia

The fact so many people associate the name people working at modern Atari with the COMPLETELY different people who sold the name away, just proves how effective that seemingly pointless purchase was.

thesineater
thesineater

"Publisher announces revenues down across the board, admits that it has "substantial doubt" about its ability to carry on." HAHA. What was their first clue? Do any of them remember what happened in 1984. They are the poster boys for being ignorant of the obvious. Anyway, we still have people here who think many don't know that this Atari is not the one from the days of the 2600. PLEASE, get a grip, a life, or something. It does not matter who or what carries the Atari label because Atari is synonymous with crap. So feel free to use them interchangeable in a sentence. Remember youngsters, the real credit for video games goes to Ralph Baer . Atari was just one of many that applied his idea. Time to bite it Atari!

deadeye75
deadeye75

[This message was deleted at the request of the original poster]

deadeye75
deadeye75

God how many times does it have to be said. THE REAL ATARI DIED A LONG TIME AGO!

ctg867
ctg867

RIP Atari. If you knock them, then that's kinda pathetic. There would be no Halo or Gears of Rainbow Six or Half Life or any of that without Atari. Be greatful. I hope everybody there can find a good paying job, and their current franchises can live on in prosperity, or have a proper burial.

strategyking92
strategyking92

uhhh and the new atari's famous games are: (none available) Oh well who cares.. Bye-Bye

DiscGuru101
DiscGuru101

Talk about 9-lives. I have seen the Atari name die sooo many times. Someone will at least pickup the trademark. -For the love of all things good: Get Alone in the Dark out.

reddevild
reddevild

I wish people on here would realize that this is NOT, i repeat NOT the Atari that brought us the 2600, this Atari is just a name and NOT the old company that we loved. I may only be 18 years old, but I have a 2600 (was my first system actually, followed by a Sega Saturn), and it has some extremely fun games (even compared to my ps2 or Wii). The original Atari only had game play to rely on, the graphics were all of 8 bit, but the game play was outstanding (reference Frogger, Space Invaders, Outlaw, Combat, and Maze Craze as some of my favorites) But all in all, its time for the name to be laid to rest and never be used again. The original is gone and has been gone and the name should have never been used again after it went under. Goodbye other Atari, I don't remember what you made, but you will finally end the references to the company that started it all.

MrOverlord
MrOverlord

It's always sad to see an old titan go. They'd better try to preserve their dignity by cutting the unnecessary and focusing on good projects. I hope good games like The Witcher don't suffer if their publisher goes bust...

Symphonycometh
Symphonycometh

Just make a pretty shooter and call it: "Final Shooter". In a few years, everyone will forget that "Final Shooter XIII-Versus" was spewed from a dying company.

hobotech64
hobotech64

What are they waiting for, another crash?

okassar
okassar

Atari will never be what it was before,they just can't do the job anymore. The fact that they started the exponential growth of the gaming industry does justify the fact they're being trodded on by all the competition now a days.

deadeye75
deadeye75

I cant believe this has to be said again. The Atari that made the 2600 is dead, they overproduced bad games. The name was bought and used by other companies a few times. The name is cursed, just let it die and try to preserve what Atari once was.

MedevilDragon
MedevilDragon

The people on here who say they want Atari to go under are NOT real videogame fans, and people who have refused to buy Atari games because they are "EA sheep" are to blame if it goses under.

Symphony_Six
Symphony_Six

with massive corporations like sony and microsoft, and the massive conglomerate that is EA, its sad to say that there really isnt much room for a true gaming company like atari. as the first company to have major success with a home console, itll be a sad day in gaming if they go under. gaming is moving further and further from its independant roots, and its real gaming companies that suffer for it. thats just how business goes, though.

MrDuDe33
MrDuDe33

Atari, we won't forget you. It's time to end this. Goodbye.

ShikamaruNaraX
ShikamaruNaraX

Poor Atari. I just hope they release Alone in the Dark before they go under.

boobush
boobush

I agree with chupamelpo, if you wanna support them don't buy games, buy their stock. And also buying games is useful.

V-Nine
V-Nine

Its great the efforts put forth to save one of the progenitiors of video games...........

fighttothedeath
fighttothedeath

hahah the joys of inserting a going concern note in any companies financial statements! Priceless!

SpruceCaboose
SpruceCaboose

RIP Atari...we had some good times together. Just not lately, which is a shame.

DemannameD
DemannameD

Its about time! Atari's had a foot in the Grave since the 8bit era.

extrmgamer2
extrmgamer2

they need to stop trying already, just sell or tank already no one cares about this Atari company anyway. Now if it was the old one, then I would have cared lol.

extrmgamer2
extrmgamer2

[This message was deleted at the request of the original poster]