The Fall of Atari

It’s been a long time since “Pong” or “Asteroids” were in the news for their pioneer like emergence into the world of video games. Unfortunately, the story is different for the maker and manufacturer of these games, a company called Atari. For many, Atari stood as a beacon and on the fore front of gaming, only to have been eclipsed in recent times by new gaming giants such as Blizzard Inc. and Electronic Arts Inc. whose sales grossly out do that of Atari’s. Earlier this year Atari announced that it would be filing for chapter 11 bankruptcy protection.

In response to the bankruptcy declaration, Atari administered the sale of all of the company’s assets.
The reason behind this giant’s collapse is the unprofitable French parent company to Atari which has not produced revenue since 1999. This had long been known to the American branch of Atari who is using their chapter 11 bankruptcy case as an additional means to put space between themselves and their French parent company.
According to Atari’s chapter 11 petition, the company owes between $10 and $20 million to as many as 200-999 creditors. Atari is reported to have approximately $10 million in sizeable assets.

On the day of the declared bankruptcy, “Atari fell as much as 5.6 percent to 84 centimes in Paris trading before closing yesterday at 86 centimes, down nearly 3.4 percent. The company has a market value of about 25.4 million euros ($33.8 million), a drop of about half over the past year.”

Whether this bankruptcy will save the long term future of Atari remains unknown however it has been able to maintain standard business operations so far.