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Atari files for Chapter 11 bankruptcy protection

Atari files for Chapter 11 bankruptcy protection

Atari's US arm has filed for Chapter 11 bankruptcy protection as it looks to split from ailing French parent company Infogrames.

Atari, one of the oldest still-extant names in gaming, has become the latest tech company to file for Chapter 11 bankruptcy protection in the US.

Atari was founded in 1971 by entrepreneurs Nolan Bushnell and Ted Dabney, after they discovered that their original company name - Syzygy Engineering - had already been snaffled. Named for a move in Go, a game beloved by both, Atari would be responsible for the creation of the world's first arcade video game - a port of the Space War mainframe title dubbed Computer Space - but is perhaps best-known for Pong, a straight rip-off of the Tennis game that was proving a hit with buyers of the Magnavox Odyssey at the time. In Atari's defence, Magnavox had stolen the idea for Tennis from a mainframe game dubbed Tennis for Two.

Later, Atari - following some questionable business practices from Bushnell - would enter the home game market with the Video Computer System, later known as the Atari 2600. Acquired by Warner Communications in 1976 - a move that would see Bushnell ousted from the company he founded - the company would launch a more powerful video gaming systems alongside fully-functional home computers. The well-publicised video games crash of 1983, however, put paid to the company's expansion plans: with the bottom dropping out of the market, Warner Communications saw its stock price drop dramatically and sold the company to Jack Tramiel - founder of Atari rival Commodore, who had been ejected from his own company in a similar manner to Bushnell.

Buying the name as a replacement for the somewhat less catchy Tramiel Technologies, Jack Tramiel would use Atari to launch a series home computers with 32-bit processors - the Atari ST line - as a way to hit back at Commodore. As the home computer market slowed down, Tramiel's Atari would launch a pair of new home consoles and the Atari Lynx hand-held. The Atari Jaguar, claimed to be the world's first 64-bit home console, would launch in 1989 - but sales were poor, the system was difficult to program for and the controller, which featured an entire telephone keypad as well as the more usual buttons, confusing. Numerous lawsuits against Atari would see the company name being sold again - first to hard-drive maker JTS in the form of a merger, and then to Hasbro Interactive which was bought by games developer Infogrames in 2000.

Infogrames would rebrand itself as Atari - because, the likely apocryphal legend would have it, US clients and customers found themselves constantly misreading the French company's name as Infogames - which brings us to the present day: Atari is a wholly-owned subsidiary of Infogrames, with the latter company having purchased all rights to the name from its previously separate US subsidiary Infogrames NA in 2008. That, aside from a brief period that saw Nolan Bushnell return to the 'Atari' board in 2010, is the Atari story in brief - minus Bushnell's intervening founding of the still-successful line of family-friendly pizza parlours Chuck E. Cheese's.

Sadly, the Atari story does not end happily in Infogrames' hands: the company has been posting significant financial losses for the last few years, which have come to head in the form of Chapter 11 bankruptcy protection proceedings. The goal, a company spokesperson has explained to press, is to find the funds required to buy itself out of its ownership by Infogrames and become independent once more. 'With this move, the U.S.-based Atari operations seek to separate from the structural financial encumbrances of their French parent holding company, Atari S.A. (formerly Infogrames S.A.) and secure independent capital for future growth, primarily in the areas of digital and mobile games,' the company's statement reads.

The company is looking to find funding - which will buy investors the iconic Atari 'Mt. Fuji' logo and the rights to classic games including Pong, Asteroids, Missile Command, Tempest as well as more modern intellectual properties - to the tune of $5.25 million, much of which it owes to the BlueBay Asset Management Company.

Under Chapter 11 guidelines, the company will be forced to accept the highest buy-out offer it receives - even if such an offer would see the company broken up and its assets split between multiple buyers - but a team of possible investors led by Jim Wilson, the chief executive of Atari's US arm, is thought to be assembling with the hope of saving the company from the scrapheap yet again.

21 Comments

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barny2767 21st January 2013, 13:21 Quote
well thats another one down.
B1GBUD 21st January 2013, 17:48 Quote
You would have thought a company like Valve could throw some spare change their way?
rollo 21st January 2013, 18:23 Quote
Why on earth would they? Not like they have made a Hit title in years.

Not a big shock to see another publisher going bankrupt, Gaming has become about the next big hits in console games. Not the regular crap that atari seems happy to make or buy ( There purchase of cryptic games was wierd )

Test drive is the biggest series they publish but they do not own the developing rights to it.
B1GBUD 21st January 2013, 18:28 Quote
The Atari brand / IP is still popular, it would hardly dent Valve's pockets. Get some devs on the case and re-release/polish up a few old titles, hell.... chuck some out as free to play. It can't be a bad thing.
mdshann 21st January 2013, 18:30 Quote
5.25 million? That's it? That just seems so low... like throw away money for someone like EA or Activision.
XXAOSICXX 21st January 2013, 19:01 Quote
Gareth - "the company would a more powerful video gaming systems - oops!
Griffter 21st January 2013, 19:03 Quote
falling like flies. what the hell is going on with these managers... proven fact, managers know much less than us normal worker bees.
Gareth Halfacree 21st January 2013, 19:12 Quote
Quote:
Originally Posted by XXAOSICXX
Gareth - "the company would a more powerful video gaming systems - oops!
Let's play pin-the-missing-word-on-the-sentence! Fixing, ta!
greigaitken 21st January 2013, 22:04 Quote
What a plethora of Atari facts. Gareth - how much did you already know, yet pretend to spend time researching it.
Gradius 22nd January 2013, 01:39 Quote
Asteroid FOREVER!
BurningFeetMan 22nd January 2013, 04:16 Quote
They could of had my money with one simple release; Roller Coaster Tycoon 4.

Sucks to be them.
st1x 22nd January 2013, 05:38 Quote
OOOOooooooohhhhh.

Right in the childhood.

:'/
Gareth Halfacree 22nd January 2013, 09:07 Quote
Quote:
Originally Posted by greigaitken
What a plethora of Atari facts. Gareth - how much did you already know, yet pretend to spend time researching it.
I won't lie: I had Wikipedia open on the 'Atari' entry in another tab to ensure I didn't make any major boo-boos with regards precise dates - but the majority of that information was from memory. I've been an Atari fan for years - I still own an Atari 1040STe upgraded to 4MB and an Atari Jaguar - and, as with Commodore, have been following the fortunes of the brand.

It doesn't hurt that I recently read a pretty comprehensive book on the early days of Atari, called Atari: Business is Fun. It's a pretty damn complete history of Atari, including some facts never before published - and a lot that bring the 'official' account from Bushnell, such as how he invented Asteroids in his daughter's bedroom, into question. Sadly, it's a print-on-demand self-pub, and the guys behind it apparently couldn't afford a decent proofreader - it's a bit distracting when 'restaurant' is written three different ways in a single paragraph...

Still, if you've any interest in Atari it's worth picking up.
BLC 22nd January 2013, 13:37 Quote
Quote:
Originally Posted by Gareth Halfacree
I still own an Atari 1040STe upgraded to 4MB

Yeah, but did you have a high-res monitor and a standard monitor for it? Second floppy drive? Yeah, didn't think so! :p

I've still got my 520STe hanging around my parents house somewhere (which also had an upgrade, to 1MB at first then to 4MB in later years). So many great games on that thing, I get so tempted to dig it out now and then. Sadly however I don't have any peripherals for it any more; I don't think any of my original joysticks & mice survived, and getting compatible ones now can be a lottery (especially mice). I really miss the QuickShot joysticks I had, they were fantastic... I have no idea where my original games are either, or if any of them even survived...

I had to have the joystick/mouse ports repaired so many times on that thing; they weren't particularly well placed and the solder joints cracked and fractured so often... So many memories of that system...

Damn you, I really miss my STe now!
Gareth Halfacree 22nd January 2013, 13:56 Quote
Quote:
Originally Posted by BLC
Yeah, but did you have a high-res monitor and a standard monitor for it? Second floppy drive? Yeah, didn't think so! :p
Yes, no, and yes, in that order. I use my TV for low- and medium-res modes, and the official Atari high-res monitor for high-res mode. Would you like pictures? :p
BLC 22nd January 2013, 14:17 Quote
Quote:
Originally Posted by Gareth Halfacree
Yes, no, and yes, in that order. I use my TV for low- and medium-res modes, and the official Atari high-res monitor for high-res mode. Would you like pictures? :p

Fair enough; I'll take your word for it, pictures shouldn't be necessary ;)
guvnar 22nd January 2013, 21:29 Quote
Oh heck, put some pictures up anyway for the rest of us, Gareth!
LordPyrinc 23rd January 2013, 09:50 Quote
I never had an Atari growing up, but played one at a friend's house. The only game that really sticks out in my memory was Pitfall. The first console I had was a Nintendo. It worked till the late 90s, but then it wouldn't read any catridges no matter how much I cleaned the contacts. I threw it away in 2004, but on hindsight, I should have kept the game cartridges. A friend of mine has one of the original NES systems that still works. The Zapper doesn't work on a flatpanel LCD or LED screen though.

Considering how the Atari name has been sold and resold over the years, it's not the company it once was. It still sucks that they are filing Chapter 11 in light of what has been going on with THQ. I own more THQ titles than Atari titles, but I really don't want to see the industry to become any more consolidated than it is. EA (Eat All) is a prime example.
spolsh 23rd January 2013, 10:18 Quote
One of my favourite gaming memories is playing a bi-plane 2 player dogfight game on an Atari console. Must have been about 10 years old at the time, and just thought everything about it was awesome.
Gareth Halfacree 23rd January 2013, 12:26 Quote
Quote:
Originally Posted by guvnar
Oh heck, put some pictures up anyway for the rest of us, Gareth!
Well, this is pretty far off topic, but what the heck.
http://gareth.halfacree.co.uk/pubimages/bittech/atari-monitor.jpg
The high-res monitor, which desperately needs Retr0briting. I'll get around to it one of these days...

http://gareth.halfacree.co.uk/pubimages/bittech/atari-commodore.jpg
The Atari 1040STe itself, buried under a C128 and a C64C.

http://gareth.halfacree.co.uk/pubimages/bittech/shelves.jpg
Just a small chunk of the detritus surrounding my life. It's a wonder the wife still talks to me, really.

Not pictured: the rest of the collection.
SMIFFYDUDE 23rd January 2013, 20:14 Quote
Atari goes tits up every 18 months, then some other daft company buys the brand name and the cycle continues. It's an overrated brand imho that only holds any weight with middle aged men and hipsters, with the former no longer gaming and the latter only knowing it from T-Shirts.
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