Atari’s US arm files for bankruptcy
The name that started it all, Atari, has filed for bankruptcy…
The games industry has been a very volatile one over the last couple of years, and recently we’ve seen publisher, THQ, go through all sorts of issues, which it’s still struggling with, and now one of the biggest names in gaming, and one of the pioneers of the market. Atari, has filed for bankruptcy (chapter 11).
Atari hasn’t exactly had a great few years, and ever since Infogrames purchased it back in 2001 it’s struggled. Games released by the company have rarely been all that great, save for a couple of exceptions, and the Atari name has, sadly, lost a lot of its former lustre.
According to the LA Times, Atari’s revenue in 2012 dropped by around 34%, with a 43% drop the year previous, and profits have been minimal. French parent company, Atari S.A.’s share price is, apparently, now worth less than a Euro, and debt is rising.
The move to file for bankruptcy would let Atari Inc (US) separate itself from the parent company, Atari S.A. (previously Infogrames), and would, in turn, also free them from Atari S.A.’s increasing debt problems. It’s believed that Atari US would then seek a private buyer, freeing it up to focus on its own priority projects, such as games for mobile platforms.
It’s also been confirmed that Atari Inc has managed to wrangle a debtor-in-possession financing deal worth $5.25 million, which would allow the company to continue operating during the process. Then, should the Chapter 11 be completed, Atari US would come out of the fracas with its own resources and no reliance on previous financers, such as BlueBay, the London-based financer that it’s currently shackled to. The remaining non-US portion of Atari would then, presumably, be sold off or dissolved.
It’s a typically complex legal situation, but if Atari Inc’s plan comes to fruition, it would secure the Atari name, and it would once again have full control of its output, which could be a good thing in the long run. Sadly, however, these kinds of situations rarely go well for the staff and those hard at work producing end products, so let’s just hope the employees of Atari don’t bear the brunt of the changes.