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Atari Reports Loss, Looking To 'Mass Market' Titles

Atari Reports Loss, Looking To 'Mass Market' Titles

June 14, 2006 | By Jason Dobson

June 14, 2006 | By Jason Dobson
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Struggling publisher Atari, a subsidiary of French publisher Infogrames, announced its financial results for the fiscal 2006 fourth quarter and year ended March 31, 2006, reporting slightly decreased losses in the face of financial challenges and disappointing sales.

The company posted a net loss of $4.3 million for the quarter, compared to $9.1 million in the same quarter in 2005. Fourth quarter revenue was $54.7 million, down from the previous year's $64.4 million, due to the release of fewer titles, as well as disappointing sales of titles such as Marc Ecko's Getting Up: Contents Under Pressure and The Matrix: Path of Neo.

Talking in its earnings call following the results, an Atari spokesperson noted that, while some profit can be had with big budget titles such as its upcoming Test Drive Unlimited and Alone in the Dark, the company is committed to providing games that have "mass market appeal", a concept that it believes can be realized through lower prices, as well as through digital distribution. The company also said in its earnings call that it is looking to the growing casual game market as a possible area of investment going forward.

Net revenue for the fiscal year was $218.7 million, down significantly from the previous year's $407.8 million. Publishing net revenue was $165.5 million, which fell from 2005's $353.6 million, while distribution revenue was $53.2 million versus $54.2 million the previous year.

The struggling Atari, which faces Nasdaq delisting, announced in May the sale of the TimeShift and Stuntman franchises, as well as the Games.com casual game site, and Texas-based studio Paradigm Entertainment.

In addition, the company also emphasized the importance of its previously announced pricing program called GamersFIRST, which will began on June 1 and effectively lowered the price point of all existing Atari console titles for the PS2, Xbox, and Game Boy Advance to $19.99. Additionally, all existing Windows titles (excluding the Turbine-developed MMORPG Dungeons & Dragons Online) were lowered to the $19.99 level as well. Additionally, all Windows titles included in the program are now available for immediate download via Valve's Steam service and IGN's Direct2Drive.

Titles offered in the on-going GamersFirst program include Dragon Ball Z: Budokai Tenkaichi, Driver: Parallel Lines, Marc Ecko's Getting Up: Contents Under Pressure, and Indigo Prophecy.

"The Atari brand has stood for innovation and pioneering spirit for more than 30 years," stated Bruno Bonnell, Chairman, CEO and Chief Creative Officer of Atari. "As Atari executes on its strategic objectives, we must recapture what made Atari an iconic brand. During fiscal 2007, we will focus our efforts on established franchises, new major motion picture licensed IP with significant marketing campaigns, online products and titles for portable devices."


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