Studio swap sees Infogrames picking up Humongous

Cash-strapped Atari sells kid-focused studio to parent; retains right to distribute studio's games for nearly a year.

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During the past few earnings calls helmed by Atari CEO Bruno Bonnell, he often made mention that parent company Infogrames would come to the aid of the distressed US-based publishing operation if it were needed. Today, such a move took place, with Infogrames paying Atari $10.3 million for the Backyard Sports dev studio in Washington state, Humongous Entertainment.

In a statement today, the companies said that the Humongous assets "consist primarily of intellectual property, existing inventory, and license rights," with "approximately $2 million of the purchase price represent[ing] prepayment of certain future costs Atari will incur related to platform royalty advances, manufacturing costs, and milestone payments."

In as many words, Infogrames was coming to the aid of Atari to keep the Humongous operation afloat--and to keep Atari itself solvent. Earlier this month, Atari reported feeble earnings for the quarter ending June 30, 2005. On sales of $24.2 million, 78 percent below those reported for the same quarter a year ago, the company reported a loss for the quarter of more than $32 million.

Atari retains "exclusive distribution rights for Humongous products in the US, Canada, and Mexico through at least March 31, 2006," the companies said.

Humongous has among its lineup of games the Backyard sports franchise, as well as licensed games based on TV shows Blue's Clues and Dora the Explorer.

Bonnell added, "This transaction substantially contributes to our resources for the launch of our largest titles in the holiday season and further enhances our capacity to develop new titles, ultimately enhancing shareholder value."

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