Infogrames Renames To Atari, Posts Heavy Losses, Envisages Profit
Lyon, France-based Atari parent Infogrames on Friday posted a net loss of €226.1 million ($319.33 million) for the fiscal year ended March 31, 2009, an increase from net losses of €51.1 million ($72.17 million) a year ago, as the company underwent significant structural changes.
But the company reiterated that it expects to be "at or above break-even" in the second half of the current fiscal year, excluding non-recurring items. In past years, Infogrames has posted a long string of financial losses, and newer management led by CEO David Gardner hopes to change that.
Infogrames attributed losses during the most recent fiscal year to "substantial write-offs and goodwill
impairments on its publishing operations as well as losses from discontinued operations due to the exit of its distribution business in Europe and Asia."
Atari and Infogrames sold its collective stake in its distribution business to Namco Bandai earlier this year.
While net losses increased for Atari during its fiscal year, sales were up 51 percent to €136.4 million ($192.77 million). U.S. revenue growth was up 82.3 percent to €93.9 million ($132.7 million).
Atari said in its earnings release that in order to improve its cash position, it has reorganized "to focus on more cost effective mass-market games and online." The company has cancelled projects "which do not meet higher return on investment criteria and require significant working capital investments" and is trying to extend its credit line beyond December 2009.
During the most recent full fiscal year, Atari acquired City of Heroes creator Cryptic Studios, which will help Atari make its move from traditional physical distribution to online. Cryptic is currently working on the MMO Champions Online, and will also be working on new games based on "Atari’s existing and historically successful IPs."
Infogrames added that it is "focusing on profitable online games and owned franchises including original driving franchises, MMOs and our Atari Classic games covering the entire history of the video game industry. The Company also announced plans to reduce cost to better support the Company’s strategy."
Infogrames' board also decided to rebrand Infogrames to Atari during the year. The next major title coming up this year from Atari is Ghostbusters in June.