Atari Files for Bankruptcy

Legendary video game company Atari has filed for bankruptcy in the US in an effort "to break free from their debt-laden French parent," according to a recent statement. Atari and three of its affiliates filed petitions for Chapter 11 reorganization in U.S. Bankruptcy Court in New York late Sunday.

Atari is, globally, not doing very well. Revenues have fallen sharply for two years running, profits have been small and its share price is now worth less than one euro. Atari's revenue has declined in recent decades. Since the early 2000s, the company has been under the rule of a French parent, known as Atari S.A.

In recent times, the US operation has focussed increasingly on mobile and digital platforms, and there's some evidence that this strategy is working. In 2012 Atari announced a competition for independent developers to create a Pong-inspired game to celebrate Pong's 40th anniversary. It also announced a partnership with Zynga, where the social game developer would publish the game developed by the winner of the competition.

Late last year the company announced its mobile line-up, which included Dungeons and Dragons, RollerCoaster Tycoon, Centipede: Origins and OutlawAtari Casino, a free-to-play casino game, was also announced and is believed to be one of the titles that has been affected by the BlueBay Asset credit lapse. A $28-million credit facility with BlueBay lapsed Dec. 31, leaving Atari without the resources to release games currently in the works.

Profits remain small, however, with the division taking $11 million and $4 million, respectively, for the last two fiscal years. Interestingly, 17% of the company's revenue now comes from the licensing of the Atari name and logo for various pieces of 'retro' merchandise. Revenue plummeted for Atari by 34% in fiscal 2012 and 43% in fiscal 2011.

Atari US hopes that by filing for bankruptcy it can "break free" and be reborn as a new company, focusing on mobile and digital platforms with little or none of its parent company's debt.

Atari is, of course, most famous for creating arcade classics such as Pong and Asteroids, along with a wide selection of games that paved the way for the gaming as we know it today.