Atari may hit reset button again
'Substantial doubt' about ability to remain afloat
Atari is in financial trouble again — or more accurately, the company that spun the Atari brand from the company that bought Atari from the company that merged with the owner of Atari who bought Atari from a split of the original Atari is hurting.
Approximately 23 years of steadfast brand necromancy has kept the Atari name from fading, yet no corporate voodoo appears to be able to keep the company from serious decay. Once famed as an arcade, game console and home computer pioneer, the Atari name has mostly stood for doom and gloom since the video game crash of 1983.
Last week Atari CEO David Pierce resigned after serving in the post for just over one year while the company announced it would completely withdraw from the game publishing business. Atari has sold its development studios, as well as the license to its Test Drive series to parent company Infogrames in exchange for $5m in advance royalties.
Yesterday, Atari's second quarter results rolled in with the company reporting a net loss of $7.7m, on net revenue of $13.3m (compared to $28.6m revenue in the same quarter last year).
The financial trouble "raises substantial doubt" about their ability to continue the business, said Atari in a Securities and Exchange Commission report filed yesterday. Atari plans to lay off 20 per cent of its total workforce, primarily in "general" and administrative positions.
The company said it is currently looking for financing and ways to improve its financial position such as partnerships and further licensing of its intellectual property.
The Atari brand has a confusing history of buyouts and mergers, passing through more hands than perhaps even staphylococcus. Read about where its been over yonder. Needless to say, it's not the same company that made your Atari 2600.
Sad news. But, hey, any readers want to split the rights to Marble Madness while the going is cheap? ®