DailyTech - Atari Files for Bankruptcy, Looks to Escape French Parent Company

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Gadgets Atari Files for Bankruptcy, Looks to Escape French Parent Company
Tiffany Kaiser - January 22, 2013 1:00 PM

17 comment(s) - last by talikarni.. on Jan 24 at 4:17 PM

(Source: awesomeclassicgames.com)

Atari's U.S. operations hope to be bought and made private

Atari's U.S. operations filed for bankruptcy this week in an attempt to escape its French parent, Atari S.A.

Atari, which has been around for 41 years now, is famous for making video games like "Asteroids" and "Pong." However, the game maker has been in financial trouble for some time now.

In the early 2000s, Atari became closely associated with French company Infogrames. In 2003, the company changed its name to Atari S.A., and five years later, it acquired all of Atari's American gaming assets.

Atari attempted to stay relevant by offering mobile versions of its games for smartphones and tablets while also updating games like "Pong." But the parent company still struggled to stay profitable.

Part of the issue is Atari's dependence on BlueBay Asset Management for cash. BlueBay is a financial company in London, and on December 31, a $28 million credit facility with BlueBay failed to be maintained. This stopped Atari from releasing new games.

However, over the last two years, Atari S.A. did report profitable earnings for the first time in a decade. But these earnings were very low, at $11 million for the last two years. But revenue did fall 34 percent in 2012 and 43 percent in 2011.

Now, Atari and three of its affiliates have filed for bankruptcy in the U.S. Bankruptcy Court in New York on Sunday. The U.S. operations hope to leave Atari S.A. and obtain a new buyer. This would take the company private.

Source: The Los Angeles Times