Founded in 1972 and famous for arcade titles such as Pong (1972), one of the first home consoles in the Atari 2600 VCS (1977), and a wave of home computer devices in the 1980s optimized for 16/32-bit gaming, Atari’s legacy transcends as many genres of the interactive entertainment industry as it dates back generations.

But recent years — the last two decades, that is — haven’t been kind to the company’s bottom line, and today Atarti Inc., the U.S. arm of the organization, has filed for Chapter 11 bankruptcy in bid to split from debt-riddled French parent Atari S.A. Potential implications of the move include a sell-off of major assets — particularly the iconic Atari logo and several renown franchises — as Atari Inc. now seeks ownership under a private buyer.

According to its official filing, Atari Inc. plans to execute the move within 90-120 days. A source belonging to the Los Angeles Times claiming knowledge of  the firm believes that its new focus, as we’ve seen with so many gaming companies forced into scaling back recently, will center around digital and mobile platforms.

Atari Chapter 11 Bankrupt

1977’s Atari 2600

Atari has made some strong inroads on iOS and Android devices following the recent success of games like Atari Greatest Hits, Outlaw and Breakout. But any further flourishing would have to come under new ownership, under a new vision for the classic franchises it’s placing up for grabs: Pong, Asteroids, Centipede, Missile Command, Battlezone, Tempest, Test Drive, Backyard Sports, Humongous — titles many gamers, either in the effulgent cramped corners of a noisy arcade or on a handheld device in more modern times, have developed fond memories of.

Sadly, though, bankruptcy had become Atari Inc.’s best option after years of shackled growth under Atari S.A. (formerly known as Infogrames). The French parent firm was existing almost entirely on loans from London investor BlueBay Asset Management, and even though its American business was the lynchpin behind to two consecutive years of profit ($11 million in 2011 and $4 million in 2012), it didn’t prevent Atari S.A. from lapsing on a $26 million loan on December 31. The struggles precluded Atari Inc.’s existing mobile development projects (two being Rollercoaster Tycoon and Atari Casino) from securing enough resources and, well, enough was enough.

Missile Command Atari Selling Bankruptcy

Earth defense in action: Atari’s ‘Missile Command’

As of now no candidates have come forward with a public offer on Atari Inc. The U.S. company is awaiting finalization on $5.25 million in debtor-in-possession financing — which would keep the lights on for current day-to-day operations — and would likely be able to resurface from Chapter 11 debt-free. It’s unfortunate to see one of gaming’s founding enterprises reduced to such a status in the first place, but under the right ownership and steady financial conditions, there’s reason to believe that some semblance of hope, of a profitable future, still remains.

Follow Brian on Twitter @Brian_Sipple.

Source: PR Newswire, LA Times

tags: Atari