Atari on the block

Jeremy Kirk
1 May, 2008
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Infogrames Entertainment plans to buy the rest of beleaguered video games pioneer Atari for $US11 million, the companies said Wednesday. Infogrames, based in Lyon, France, owns 51.4 percent of Atari’s stock. The merger will give Atari shareholders $US1.68 per share in cash.

The deal must be approved by shareholders. Atari plans to call a special meeting on the merger after July, the companies said. However, since Infogrames owns a majority of shares, it could push the deal forward without the approval of Atari’s current shareholders.

Infogrames said the merger will allow it to have more control over restructuring Atari to become a bigger player in the North American market. It will also loan Atari $US20 million to keep its operations going until the deal is complete.

Atari dominated the video game console market in the late 1970s and early 1980s with classic games such as Pong, Asteroids and Space Invaders. But game and console makers such as Nintendo and Sega later stole Atari’s crown. The company never fully recovered.

In May 2007, Atari said it would cut its workforce by 20 percent and spend between $US800,000 and $US1.1 million on restructuring the company.

Since last October, Infogrames has been working with Atari to stabilise and focus its distribution efforts. The Atari Group, which operates in the US, Europe and Asia, produces games such as Alone in the Dark, V-Rally, Test Drive, Backyard and licenses others such as Dragon Ball Z.

Those games are produced for a variety of platforms, including Sony’s PSP and PlayStations 2 and 3, Microsoft’s Xbox 360 and Nintendo’s DS, Wii and GameBoy Advance.

In March, Jim Wilson, a video-game industry veteran, was appointed as Atari’s CEO. Wilson most recently worked as executive vice president and general manager of Sony Wonder, part of Sony BMG’s home entertainment business.

Infogrames has owned the Atari name since 2001, and it has been releasing games under the Atari moniker since then.

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