Atari losses top $319 million, Harrison steps aside
Massive "transformation" costs send publisher into red despite annual revenue increase, much-touted president moves to nonexecutive role; unnamed projects canceled; Champions Online hitting Xbox 360 during holidays.
It has been a turbulent few years for the various incarnations of Atari, with its American arm battling with stock-market delistings before being folded into parent company Infogrames last year. After the reorganization, the company continued to bleed cash despite a recent uptick in revenue.
Things looked to be turning around for the publisher when former Sony Worldwide Studios head Phil Harrison came on board as Infogrames president. Along with new CEO David Gardner, Harrison declared that the company wanted to "stop losing money" and that it was to increase its focus on online and social games. Then, in a dramatic move, it acquired Cryptic Studios, developer of the massively multiplayer online role-playing games Champions Online and Star Trek Online at the end of last year.
The company's recovery seems to be progressing slowly, though. Today, Infogrames reported its full-year results for the 2008/2009 financial year and also announced it was changing its name to Atari. Unfortunately, it also revealed a massive annual net loss of €226.1 million ($319.5 million, £197.7 million). The company pinned the massive shortfall--up from 2007/2008's €55.1 million ($77.7 million, £48.2 million) loss--on one-time costs relating to the firm's "transformation." These included €13.9 million ($19.6 million, £12.1 million) of restructuring charges and a €40.3 million ($56.9 million, £35.2 million) impairment of goodwill charge. Once those are disregarded, Atari posted an adjusted net loss of €50.2 million ($70.3 million, £43.9 million).
Ironically, revenues were up significantly year on year, with the company bringing in €136.4 million ($192.4 million, £119.1 million) during 2008/2009, compared to €90.3 million ($127.4 million, £78.9 million) in 2007/2008. Broken down by platform, the Xbox 360 was responsible for more than a quarter of the firm's income last year. The year prior, it was the DS, which led the charge, bringing in almost a third of the firm's revenue. PC titles accounted for 22 percent of the firm's revenues in 2009/2009, followed by the Wii and DS with 15 percent each, followed by the PlayStation 3 (12 percent), PlayStation 2 (8 percent) and PSP (2 percent).
Looking ahead to the 2009/2010 fiscal year, Atari is making some drastic changes. Not only is it shifting primary business operations to the US, but it is also shaking up its management. After taking the presidency to much fanfare just over a year ago, Harrison is stepping down, assuming the role of nonexecutive Director of the Group where "he will continue to assist, support and guide the company's strategy." Board member Jeff Lapin--former CEO of both THQ and Take-Two Interactive--is taking the position of chief operating officer under CEO David Gardner.
Games-wise, Atari made the ominous announcement that it "has cancelled projects which do not meet higher return on investment criteria and require significant working capital investments." No specific games were mentioned. More positively, it touted its lineup for the year, including the recently released Chronicles of Riddick and Ghostbusters: The Video Game, due out next month. Champions Online is due out for the PC in September, and Atari revealed it will arrive for the Xbox 360 during the all-important October to December holiday quarter. Star Trek Online is still expected to launch by the end of Atari's fiscal year on March 31, 2010.
Got a news tip or want to contact us directly? Email firstname.lastname@example.org