Atari running out of quarters?

Publisher expresses "substantial doubt" about its own future in belated earnings filing; revenues shrink to $10M as losses rise to $12M.

The Atari name has been tied to periods of tremendous success and financial failure. It is currently weathering a rocky couple of years that has seen the Infogrames subsidiary cease all internal development of games, sell off valuable studios and properties, institute wide-ranging layoffs, repeatedly flirt with delisting from the Nasdaq stock exchange, fight to retain the lucrative Dragon Ball Z license, and unexpectedly overhaul its board of directors, much to the chagrin of some investors.

Now the publisher isn't sure if this is a slide from which it can recover. Last month Atari announced a change to an existing line of credit. However, in its just-filed report for the first quarter of its fiscal year 2008, Atari said the maximum amount it can borrow through the agreement won't even provide the funding it needs to make it through the current holiday season. Atari management is looking for additional financing, though by the company's own account, there's no guarantee it will materialize.

"The uncertainty caused by these above conditions raises substantial doubt about our ability to continue as a going concern," Atari said in its filing. The publisher is considering another round of layoffs and suspended development on multiple games to save some money.

"The above actions may or may not prove to be consistent with our long-term strategic objectives, which have been shifted in the last fiscal year, as we have discontinued our internal development activities and increased our focus on online and casual gaming, among other things," the filing reads. "We cannot guarantee the completion of these actions or that such actions will generate sufficient resources to fully address the uncertainties of our financial position."

The filing was actually the publisher's belated quarterly report for the three months ended June 30, 2007. For the quarter, Atari brought in $10.42 million in revenues, down from $19.47 million for the same period the year before. It also saw its net losses spike to $11.94 million from the prior year's $7.30 million shortfall. At the end of the quarter, the company's total assets measured $34.99 million.

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290 comments
Snaptrap
Snaptrap

The real Atari is dead. Infogrames took on all Atari properties and changed their name to Atari. The Atari name in itself is just a curse brought about from the Tramiel family who dragged the name through the dirt with failures such as the Jaguar and trash games such as ET. If I was Infogrames, I'd dump the name.

tiltus
tiltus

If the die, then their assets (and licenses) will most likely be liquidated and sold off individually, unless there is a takeover or the like...

greater_bird
greater_bird

If Atari dies, what happens to their game series? Do they die with it, or get sold to others?

SpazH3d
SpazH3d

Finally! Oh, did i say that out loud? :|

enoslives7
enoslives7

bring out the Jaguar 360 and Lynx-Lite, and Atari would totally rule again......

qiwihead
qiwihead

As many in my generation, I began gaming with the Atari 2600. But that was 30 years ago, and Atari hasn't really been a power player in at least 20 years. Today's Atari has nothing whatsoever to do with the original Atari, so their going bankrupt really has no impact on the gaming industry. Does anyone really care about Atari anymore, aside from having their old logo on hipster T-shirts?

Devvy01
Devvy01

so where did all the profits go? CEO's pocket?

spelledarn
spelledarn

Neverwinter Nights 2 was worse than Baldur's Gate 2 in every respect except the graphics, but beating a 6 year old game really isn't saying much. Atari has been too cautious to innovate, and this is the result.

SorrowsFlame
SorrowsFlame

With how badly they screwed up Neverwinter Nights 2, they deserve this. -.-

dorohala
dorohala

This what happens in big business, Big big companys like that make money but at the end of the day they become bankrupt. Thats how life is people!!!

hwatney
hwatney

Eventually the Atari name (regardless of who owns it at the time) will die the thousand deaths it deserves for ET the Extraterrestrial and the 2600 version of Pac-Man, the world's worst game port ever. Then this will all end and Atari will be allowed to live again as it once was.

gordanfreeman53
gordanfreeman53

I kinda feel sorry for Atari but this happens in the world of business.

JohnnyNeat
JohnnyNeat

All I can say is I feel bad, but they should have hired up and coming creators. Living off a name and old fame runs out.

smbius
smbius

It's sad really. IgnorantGames has done in Atari so bad that no one really cares about that brand anymore.

Diraan
Diraan

I agree with Nirvana0511, if Atari goes under, I hope one of the bigger companies will pick up the name. It would be a shame if Atari was to exit the gaming world

Nirvana0511
Nirvana0511

Either Microsoft, Nintendo, or Sony may want to take a chance on either reviving the company or just taking the name as a means to releasing the games online and/or re-adapting any franchises that are still Worth selling. Like for instance : Paperboy, The Star Wars Arcade Game(s), Tank/Combat Series, 720 (The Skateboarding game), Dragonball Z games, The Alone In The Dark Franchise, Rampart, etc. Imagine a new graphically significant version of Rampart on the PS3/360 or a New Version of Paperboy for the Wii where you throw the Papers with the Wiimote? That would be pretty sweet.

Buttonio
Buttonio

It's a shame Atari is practically dead, they still have alot of potential but they haven't had a single game that i've wanted for ages.

Kounji
Kounji

I think its probably time for them to start shoping for a buyer. The sad thing is the only big buyers in town are EA and UBISOFT and I don't think they want to dilute either of their brands. I think what's going to happen is that in another year they will most likely have to sell the company or head toward bancruptcy. The bad thing is their only points of value are the neverwinter nights franchise and DBZ which have to get sold and bought up by another company. The D&D license as well will need to get sold. They just aren't making enough dollars to truly stay a float. This is generally what happens with companies that are unable to continue as going concerns. That or private equity if they see segments that are still viable buys them out. Though they got rid of their development team so I doubt they'd want to hang on to management. Hate to say it but if I worked administratively for Atari I'd start shopping for another job and asking for a severance package

werc96
werc96

People....This is NOT the real ATARI! The brand name was BOUGHT by the absolutely mediocre (save for DBZ AND INDIGO PROPHECY) Infogrames. The brand name is a legend. So they used it to try and sell more games, And attract consumers. They mis-used it, rushed out their games, And are dealing with the consequences. I hope they can find a way to stick around. I like low key developers. All they need is ONE game to save em. Heres hope for them.

PatLTornado
PatLTornado

Zues, the downfall of Atari begin in 1984 right after the market crashed, Commodore 64 creator Jack"Satan" Tremiel was fired by his own company so when he joined Atari being an anti-console person, he not only invested the company's future only in computers but he sold the company's game divisions off piece by piece. in 1985, Sega purschased Atari's arcade division and published alot of Atari titles in Japan when Nintendo tried to approach Atari about marketing thier Famicom in the west as NAVS(Nintendo Advanced Video System)but because of -anti-Japanese xenophobia and because of Atari 7800 which Atari had planned to launch in 1984, Tremiel snubbed Nintendo and we all no what happened the following year with NES. Even in 1987, a year after the 7800 was igonred by consumers, Triemel started playing dirty,annoyed at Nintendo's strict 3rd party policy he tried to take them to court but lost. Lynx, Atari's first handhled console was too ahead of it's time and too costly for most consumers it failed miserably. Even by early 1994, when Sam Triemel who was opposite of his father he called "Darth Vader" he had one final ace in the hole: The Jaguar. The worlds first 64-bit console but here's where Zues' points come in where the end finally came for Atari. After a moderately successful launch of Jaguar, Atari missed alot of deadlines and the system had very little software support in '95 Atari had plans to release a CD-add on since SEGA CD was the first successful CD add on release but that was the final nail in the coffin for Atari. Though in 1996, Atari Games tried to survive, they went through a period of releasing very few software for consoles and got very little business. So by 2002 it was over. Interesting enough, it's kinda funny how people who hate SEGA seem to want to predict that the same thing will happen to them, when six years after they left the console market, they have lots of business, still make dozens of games, still produce arcade hardware(Atari produced very little during 1994-96) and still manage a strong profit and make more moeny then they did during Dreamcast. Hence forth, I believe that Atari(Infrogrames) could benfit from SEGA purchasing them.

the1stmoonfly
the1stmoonfly

I hope this doesnt mean the test drive server will be getting switched off. Even worse, whats going to happen about test drive unlimited 2

Poodlejumper
Poodlejumper

Wonder where the D&D license would go... Black Isle is gone...so it wouldn't go back to them. If it did go to someone with talent we might see a return of quality RPGs like Baldur's Gate or Planescape as opposed to the cookiecutter drivel Infrogames/Atari has been shoving down our throats all the while pretending it's nectar of the gods... What I woulnd't give to see those kind of games make a comeback... If done right they'd make Oblivion look like Dragon Quest for the NEC.

Warfust
Warfust

It would be sad to see them disappear, they ahve been around for so long.

wiidominance
wiidominance

yup ... the current pricing scheme of games its taking its toll on less than gigantic Studios .. Just so you know, 90% of the money goes to 10% of games. This is just unfair. Let them release their best lineup at a price of 10$ and let them witness how the revenues spark sky-high ...... oh, well, they just don't listen .. do they ? even their total assets which i assume includes all their franchises doesn't exceed 50 mill, thats no good, am sure the guy who created atari and pong forgot his name, is totally pissed off at this point, actually now that i mention it, maybe he can regain control over atari again if he's interested ..

arc_salvo
arc_salvo

Ah, Infogrames, why did you buy the Atari logo for no reason? Also, why did you force Obsidian to release NWN2 way too early? Oh well, I hope this teaches publishers a lesson about how you need to release quality games that are feature-complete, bug-free and polished if you want to survive. Oh, and fun to boot.

zeus_gb
zeus_gb

It's a little early to be predicting the downfall of Atari. If they do get into really problems hopefully someone with a little bit of imagination and knowledge will take over. Maybe even revive the Atari hardware brand (i'm dreaming of the good old days again). My not really sure why lots of people are saying that the Jaguar was the reason for Atari's original downfall. The Jaguar had a part in it but it wasn't the only thing. Management ineptitude, cutbacks on the hardware in their computers, late releases, missed opportunities, lack of newer computer hardware all contributed to the original downfall of Atari.

PatLTornado
PatLTornado

Listen uhh everybody, Atari is dead. They went under in 2003. Infogrames brought most of what was left over. What I was saying is since SEGA likes to obtain new developers every once in a while, I don't see why they won't want to buy Atari games.

rocky_aj17
rocky_aj17

the time is coming..near EA chicago studio closed atari in losses and some other publisher's also in losses...u big guys cut the heavy cost of cards and rigs and reduce game price

rocky_aj17
rocky_aj17

Atari is not giving good content for gamers thats why people dont buy their games..

PatLTornado
PatLTornado

I can see the headlines now: "SEGA corp buys Atari stock." I'm pretty sure SEGA can do something right with Atari.

daweguy
daweguy

robx360 Maybe EA will buy it. owned :lol

HALCONAZUL
HALCONAZUL

Noooo!!! dont die Atari, but for the sake of your pride dont go with EA

SegaFan_Ssk
SegaFan_Ssk

If they go, I probably won't miss them all that much. Sure they did some great work with the DBZ licence, and also have Ikaruga to their credit, but there were some stinkers (Enter the Matrix, DBZ Sagas) that are questioning their overall quality control.

AliasUK
AliasUK

=O What about Driver? Make Driver! And make it good this time! Ok, that's unfair. The Driver games are OK, but lack something. Other than that though, I can't think of a good line of games from Atari =| Atari NEEDS to survive! It's an institution! Maybe if Sony, Msoft or Ninty buy it, they can use it for external development =D Atari Studio =D A rebranding is in order! @hwatney - The Japs bombed Pearl Harbour, not The Krauts.

kaziechameleon
kaziechameleon

sad, they were tied to the unreal license did they drop that connection, those games have always sold well.

hwatney
hwatney

Aw come on everyone! Nothing is over until we decide it is! Was it over when the Germans bombed Pearl Harbor? Hell no! I say we all pitch in $20 a piece and buy Atari ourselves! We can sell tee shirts, maybe Bono can hold a benefit concert...Brangelina could show up...it'll be great! Who's with me?

fluffebunnie
fluffebunnie

"Sounds like you have not played The Witcher or Fahrenheit(Indigo Prophecy)." Not everyone is well-informed. Great games.

Tylendal
Tylendal

Wow, thanks Supermariomelee. In that case, I hope that they don't go under.

N8A
N8A

How sad...time it wont be the Jaguars Fault.

supermariomelee
supermariomelee

Tylendal- No, it's not the same company. Infogrames bought the rights to the name. In 2003, they changed the name of the company from Infogrames to Atari. Seemes it wasn't a good Atari, since every company that bears the name seems to go under. Midway had a section in the 90's named Atari(when they owned the rights) & were forced to close it. Of course the biggest screw up is the original company, which went bankrupt in the mid-90's after releasing the Jaguar.

LordSpleach
LordSpleach

I still surprised to see that Atari survived the game crash.

ElvenArcher
ElvenArcher

It's just Infrogames games dying. They're failures and didn't deserve the Atari legacy. Maybe now a good company can revive Atari. If EA buys them, however, Atari is doomed forever.

KamuiFei
KamuiFei

Atari is on its last legs it seems. Oh well...it was fun while it lasted. This is what happens when the founder thinks current games are "unadulterated trash"...

Tylendal
Tylendal

Aren't these the guys responsible for killing the American Video-game industry in 1983? :roll: