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Old 02-10-2006, 10:28 AM   #1
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Default "Substantial" doubt over Atari's future as profits plunge!

Looks like Atari are in for some trouble, not having enough profit for a few years running. Closure of studios' or selling of game rights should probably be happening in the future.

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Originally Posted by Game Industry Biz
"Substantial" doubt over Atari's future as profits plunge

Publisher continues cost-saving moves as HSBC refuses to extend further credit

Atari Inc, the US division of French publisher Infogrames, has confirmed that the company's ability to continue as a going concern is now in question after its third quarter results slid into the red.

The firm's results for the quarter ended December 31st revealed sales down to $100.8 million from a figure of $156.4 million a year previously, while profits collapsed into a net loss of $4.8 million, from a profit of $19.6 million in the previous year.

The figures are a slight improvement over the rest of the financial year to date; over the past nine months, Atari's sales have fallen more than 50 per cent year on year to just $163.4 million (down from $332.5 million), and the firm is trailing a nine-month loss of $62.8 million compared with a nine-month profit of $14.8 million in the last three quarters of calendar 2004.

Even more troubling for the company than its losses, however, is its precarious financial situation - with the company currently in default on a variety of covenants related to its credit facility with HSBC, which is currently refusing to extend further credit to the struggling publisher.

Atari is now exploring the various measures available to it to stay in business, including moving to a new credit facility, the sale of various intellectual property rights and the sale or even closure of some of its development studios.

The company has also revealed that it's looking into making layoffs and suspending various projects in development in a desperate attempt to control its costs and lower its working capital requirements.

In the midst of the crisis, another blow to Atari has come with the departure of the company's Chief Financial Officer, Diane Baker, who has resigned to "pursue a new opportunity" - with no replacement yet being announced.

Despite the uncertain future the company faces, chief executive and chairman Bruno Bonnell announced a number of new products along with the firm's Q3 results - namely a new game in the Stuntman franchise for the Xbox 360, a new Alone in the Dark title for the PC, and a return to the classic Battlezone franchise on the PSP.

Unsurprisingly, shares in the publisher sank on the news, and were trading down nearly 14 per cent at $0.78 in New York at the time of writing - having dropped almost 30 per cent of their value overnight to open at $0.63, but rallying slightly as the day went on. Atari's stock hasn't traded at over the $1.00 mark since mid-January.
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Old 02-10-2006, 03:58 PM   #2
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And the curse of Atari strikes again. Infogrames should never have bought the damn company.
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Old 02-10-2006, 04:02 PM   #3
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After the recent trend of rushing games out the door and getting a bad rep for bugs, I don't feel the least bit sorry for them. They are probably hoping that by publishing Unreal Tournament 2007 (assuming they are still with epic on that one) will pull them out of the hole.

Its a shame that games like Boiling Point could have been so much more if they allowed the development teams to spend more time on them.
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Old 02-10-2006, 04:10 PM   #4
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At least they got Fahrenheit out without cutbacks.
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Old 02-10-2006, 04:12 PM   #5
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Quote:
Originally Posted by stuboy
At least they got Fahrenheit out without cutbacks.
Indeed.
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Old 02-10-2006, 04:35 PM   #6
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Well, I think Crashday isn't affected by this, it should come out in 2 weeks. Which is good, oh yes.
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Old 02-10-2006, 04:38 PM   #7
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Quote:
Originally Posted by avatar_58
After the recent trend of rushing games out the door and getting a bad rep for bugs, I don't feel the least bit sorry for them. They are probably hoping that by publishing Unreal Tournament 2007 (assuming they are still with epic on that one) will pull them out of the hole.
No, Epic are with Midway now. And when I read that Epic had jumped ship I realised Atari were screwed.
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Old 02-11-2006, 12:52 AM   #8
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Quote:
Originally Posted by RLacey
No, Epic are with Midway now. And when I read that Epic had jumped ship I realised Atari were screwed.
In that case...yeah, I would agree. Unless something AAA falls onto their lap they are pretty screwed.
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Old 02-13-2006, 01:35 AM   #9
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You know it's odd, because Atari published Matrix: Path of Neo. One would think they made several million off that game alone with the strong following the Matrix series had and whatnot.

Maybe it has something to do with Shiny. Interplay sunk shortly after they published Shiny's games (Sacrifice and Messiah), and now Atari is in quicksand.

(LOL that was just a malicious sarcastic observation I was making, nothing personal against Shiny, whose games I always loved.)
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Old 02-13-2006, 05:46 AM   #10
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Well, Atari burned their bridges with Enter the Matrix. That sold a vast number of copies but was generally considered to be a poor game; to expect people to shell out for a second game that had received mediocre reviews was perhaps asking a bit much.

As for Shiny, I've always found them a bit mediocre (sorry!). They're a bit like Peter Molyneux in failing to deliver what they promise, but they make it worse by never actually aiming that high .
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Old 02-13-2006, 05:48 AM   #11
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I wonder if this will see Obsidian under yet another publisher's thumb eager to release too early. NWN 2 is still under the Atari brand.
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Old 02-13-2006, 06:08 AM   #12
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Quote:
Originally Posted by RLacey
As for Shiny, I've always found them a bit mediocre (sorry!). They're a bit like Peter Molyneux in failing to deliver what they promise, but they make it worse by never actually aiming that high .
I hope shiny bring back Earthworm Jim.
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