Can Atari Save Infogrames?
Infogrames, Europe‘s largest creator of video games and owner the Atari brand, has spent 2 years attempting to pay off massive debts. It has reached a deal recently with its bankers to see it through the crucial Christmas trading period. The company is also working on refinancing €117m (£81m) worth of bonds which are due to convert into stock next year and has been worrying investors for some time.
BBC News has reported that company shares have been suspended in Paris. The company, which has a 57% stake in console pioneer Atari, added that it expects sales for the last three month to be in line with the guidance it gave analysts over the summer.
With the news of the suspension of Infogrames’ shares reached London, Eidos shares raced as traders speculated about a possible bid for the creator of action heroine Lara Croft. But Infogrames said that it was not in any bid situations. BBC also reported that although Infogrames is Europe’s top video games maker, the first quarter of its sales dropped by 20% despite better sales in the U.S. Infogrames have produced many game titles across different console, one of its best-sellers have been based on the film The Matrix Reloaded.
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Infogrames, Europe‘s largest creator of video games that also owns the Atari brand, has spent 2 years attempting to pay off massive debts. It has reached a deal recently with its bankers to see it through the crucial Christmas trading period. The company is also working on refinancing €117m (£81m) worth of bonds which are due to convert into stock next year and has been worrying investors for some time.
BBC News has reported that company shares have been suspended in Paris. The company, which has a 57% stake in console pioneer Atari, added that it expects sales for the last three month to be in line with the guidance it gave analysts over the summer.
When the news of the suspension of Infogrames’ shares reached London, Eidos shares raced as traders speculated about a possible bid for the creator of action heroine Lara Croft. But Infogrames said that it was not in any bid situations. BBC also reported that although Infogrames is Europe’s top video games maker, the first quarter of its sales dropped by 20% despite better sales in the U.S. The company have produced many game titles across different console, one of its best-sellers have been based on the film The Matrix Reloaded.
Atari is one of Infogrames’ majority owned subsidiary that develops, publishes and distributes games for all major video game consoles, as well as for the PC, and is currently one of the largest third-party publishers of video games in the United States. They acquired the Atari brand name from its purchase of Hasbro Interactive, which in turn had acquired it from JTS Corporation, which the original Atari had merged with in 1996. Infogrames, Inc. intermittently used the Atari name as a brand name for selected titles before IESA officially changed the U.S. subsidiary’s name to Atari, Inc. in 2003.
1970 was the year when Atari rose as video game empire, selling millions of Atari 2600 (VCS) and computer while being part of Warner Communications. Then in the early 1980s, Atari ran into problems alongside a fierce competition with Mattel’s Intellivision and price wars in the game console and home computer markets. The decline goes on a steady stream until finally, Midway Games West (Atari was renamed as Midway Games West after Midway held closed door proceedings with Hasbro) was shut down in 2003.
In October 2001, Infogrames announced that it was “reinventing” the Atari brand with the launch of three new games. Then the release of the plug-and-play video game console called the Atari 10-in-1 TV Game by Jakks pacific, a toy making company, was launched on 2002. The same company also created a device called Atari Paddle Games, in the shape of one of the 2600’s “paddle” controllers with appropriate titles included in 2004. At the same year, Atari also released a TV game of their own called Atari Flashback Console which resembled a minute version of the Atari 7800 console originally released in 1984.
In the late October 2005, Atari released Atari Masterpieces, one of the two collections of its classic arcade games, exclusive to Nokia N-Gage console. The second Atari Masterpieces was released on March 2006. Some the games includes classic arcade games like Asteroids, Battlezone, Black Widow, Millipede, Missile Command, Red Baron, Lunar Lander and Super Breakout. Recently, Atari’s game catalog contains some of the game titles that are not too bad from a gamer’s standpoint.
Neverwinter Nights 2, the computer role-playing game currently in development by Obsidian Entertainment and the sequel to BioWare’s Neverwinter Nights is slated to be released this October and it looks very promising. Alone in the Dark 5: Near Death Investigation, the fourth sequel of the survival horror video game Alone in the Dark (PS3, Xbox 360) series has been hailed by producers and developers to be open-ended and expansive, one such feature is the hot-wiring mini game.
Dungeons and Dragons Tactics, the upcoming Turn-Based Strategy game, also performed well in the Electronic Entertainment Expo this year. One of the Atari representatives during the E3 said that, “Atari continues to move forward and seek out groundbreaking, imaginative and entertaining properties like the underground based, street smart HOT PXL. Evident as part of our E3 line-up, these and other games are all part of the Company’s evolution and continued focus on gameplay.”
But games are not only what it takes for a game publisher to succeed as business decisions and strategies are crucial to any company. Atari has chosen to sell off studios and assets instead of buying them. Infogrames and Atari chairman and chief creative officer Bruno Bonnell said its part of getting the company lean and focusing more on core products.
But even the debt-restructuring program of Infogrames is not enough to fish the company out of trouble. Wedbush Morgan Securities analyst Michael Pachter said that the problem is how to get the stock price up. ” They need to get publishing revenues up to $400 million or so, and can do that with 40 $10 million games or four $100 million games. The dilemma is that they don’t have the assets to generate four $100 million games, and it takes a lot of effort to put out 40 modest games. “, said Pachter.
One of Atari’s moves that has helped seep in higher unit sales is to release Test Drive Unlimited for Xbox 360 at the bargain price of $39.99 in the US this year, making the game financially accessible to more consumers. In addition, Atari is planning to become more consumer friendly, with Atari’s sales and marketing VP Nique Fajors admitting that, ” This industry has been taking consumers for granted for way too long.”
Via next-gen.biz