Atari Profits Down, Closing Two Studios

Gamespot has the word that Atari has reported a drop in profits for the third quarter. Earnings were down roughly $30 million compared to the same period last year. As a result, they are closing the company's Santa Monica and Beverly, MA studios. From the article: "In an e-mail sent to employees shortly before today's earnings call with analysts, new Atari CEO and president Jim Capparro outlined his plan to 'move Marketing and the coordination of Product Development and Production to New York, where those functions will be in close proximity to our center of operations.'"

Comments

Re:Atari?

[robnauta]

In 1984 Atari was divided into Atari Games and Atari Corp. The Corp made the ST, this article talks about Atari Games.

Atari History Recap

1971 Nolan Bushnell designed the first commercial arcade video game called "Computer Space", but it was not a big success.

1972 Atari Inc. was founded by Nolan Bushnell from a $250 investment. Pong arcade game becomes a smash hit.

1976 Atari Inc. was sold by Bushnell to Warner Inc. for $28 million.

1980 Atari Inc. posted record sales, $2 billion profits annually. Atari occupied 80 offices in Sunnyvale, California.

1983 Decline of video games and irresponsible spending by Atari Inc. resulted in record losses ($536 million, up to $2 million daily).

1984 Warner divided Atari Inc. to Atari Games (arcade games), and Atari Corporation (Home division). Atari Corp. was sold to Jack Tramiel.

1985 Atari Corp. released Atari ST home computer.

1989 Atari Corp. released Atari Lynx, the world's first color hand-held video game system.

1993 Atari Games became Time-Warner Interactive.

1993 Atari Corp. released Atari Jaguar, the world's first 64-bit home video game system.

1996 Time-Warner Interactive (Atari Games) was sold to WMS.

1996 Atari Corp. merged with JTS Corporation.

1998 Atari Corp. software and hardware rights were sold to Hasbro Inc. for only 5 million dollars.

Restructuring not result of revenue decrease

[aralin]

The blurb is a little wrong here, the restructuring and closing of two studios is a result of new, more responsible management that took reins this quarter. Atari used to have some pretty hopeless projects, its only good if the management will concentrate on the good and cut the bad.

The revenue and profit decrease was a result of delaying one game, until its ready and not rushing it to market as happened in the past. It seems to be a sign of the new management trying a new way and build the brand name, instead of just trying to maximaze short term profits.

Besides, the profits for this quarter, although being slightly down year over year, have still beat the average analyst estimates.

The conference call yesterday has been by many characterized as a breath of fresh air, because after years of shady business, there seems to be open and honest management at top of the company, that is forward and plays it straight with the investors.

Despite the fact I have more confidence in the new management, the short term outlook for the company is not any good, at least for a quarter or two. Long term, they will hopefully turn it around.

Told you so

[FictionPimp]

Ha! and their customer support laughed at me when I said my boycott would hurt them. They just didn't realize how many games I buy a quarter!

Seriously though, I really hope good game makers like bioware stop distributing via atari. They use sub standard disks, paper sleeves, and their support sucks. Not to mention their use of very crappy copy protection that doesn't work on a lot of dvd/cd rom drives (like sony drives). Or my favorite "You must uninstall disk emulation software to play this game". Yea right, I'll get right on that.

I hope the big guys do so bad that more small studios start showing up, with online distribution models. These mega companys are going to kill pc gaming.