Atari US Contemplates IP Suspensions and Lay-Offs

Atari US and their growing doubts about their ability to continue has become such a growing concern that the company is considering harsh steps to keep the company going. With funding from parent Infogrames being unlikely, it is instead considering “suspending current development projects, laying off more staff and selling its remaining intellectual property”.In an SEC filing, Atari US stated that “Historically, we have relied on Infogrames Entertainment SA to provide limited financial support to us, through loans or, in recent years, through purchases of assets, however, IESA has its own financial needs, and its ability to fund its subsidiaries’ operations, including ours, is limited. Therefore, there can be no assurance we will ultimately receive any funding from IESA. The uncertainty caused by these above conditions raises substantial doubt about our ability to continue as a going concern.”

Yesterday, the publisher was slammed with the news of a second quarter net loss of $7.7 million, with their net revenue dropping from $28.6 million to $13.3 million.

“We continue to explore various alternatives to improve our financial position and secure other sources of financing which could include raising equity, forming both operational and financial strategic partnerships, entering into new arrangements to license intellectual property, and selling, licensing or sub-licensing selected owned intellectual property and licensed rights,” said the publisher.

Last year, to make ends meet, Atari sold its Driver franchise and Reflections to Ubisoft, and also sold Shiny Entertainment to Foundation 9. Also last week, Atari ended a production agreement with Infogrames, and decided to concentrate on publishing and distribution in the US instead. Even with selling off bits and pieces and culling certain production agreements, the company states that further action may have to include lay-offs and halting the development of games already in the works.

“We continue to examine the reduction of working capital requirements to further conserve cash and may need to take additional actions in the near-term, which may include additional personnel reductions and suspension of certain development projects during fiscal 2008. The above actions may or may not prove to be consistent with our long-term strategic objectives, which have been shifted in the last fiscal year. We cannot guarantee the completion of these actions or that such actions will generate sufficient resources to fully address the uncertainties of our financial position.”

With a number of projects in development, including Alone in the Dark, we may soon find that games we may have been looking forward too will either be sold to other companies or axed all together. Gaming Today will keep you posted as more information on the sad state of Atari is announced.

Via: GamesIndustry.biz