Originally reported by the LA Times, Atari Inc. as well as three affiliates filed for Chapter 11 reorganization in New York’s U.S. Bankruptcy Court. “The move is an attempt to break free from its French parent Atari S.A. and refocus the company to make digital and mobile titles, according to an anonymous ‘knowledgeable’ source,” Gaston writes.
The U.S. arm of the Atari company has had some long-standing financial difficulties. While its titles are iconic across the globe, its revenue fell 34% in 2012, and 43% in 2011. The LA Times pointed out that, as sign of its troubles, licensing the Atari logo for titles makes up 17% of their revenue.
Another major problem for the U.S. arm of Atari is its almost-total reliance on BlueBay Asset Management, a London financial company. This arrangement “lapsed on Dec 31 and means the company lacks the funds to release any of its games currently in the works, one of which is the money-gobbling Atari Casino,” Gaston says.
Atari’s shares have dropped from 11 Euros, starting to 2008, to less than 1 Euro currently.
Atari was one of the pioneering companies in video games. They shaped the direction the medium would take in the 70s and 80s, with classic titles like “Pong”, “Asteroid”, and “Breakout”. Infogrames, a French publisher, licensed the Atari name in 2003, and then bought the entire company’s American assets in 2008.
For more information, check out Martin Gaston’s article at Gamespot.