Anyone who was a child in 1980's has the ability to feel a sense of nostalgia with a single word: Atari. Whether you dropped your quarters at the arcade to play Pac-Man, sat in front of the TV with your 2600 till your eyes hurt, or first discovered the "endless possibilities" of an 8-bit computer, Atari has influenced you one way or another. So, in the sense of VH-1's murderous exposition of reality, I ask the question: Where are they now?Anyone who was a child in 1980's has the ability to feel a sense of nostalgia with a single word: Atari. Whether you dropped your quarters at the arcade to play Pac-Man, sat in front of the TV with your 2600 till your eyes hurt, or first discovered the "endless possibilities" of an 8-bit computer, Atari has influenced you one way or another. So, in the sense of VH-1's murderous exposition of reality, I ask the question: Where are they now?
I recently stumbled upon the company while flipping through Google's finance sites looking for a promising investment. When Nasdaq's ATAR came across the screen, I got excited. It was like stumbling across an old friend that you haven't seen in years. I just had to see what wonderful Willy-Wonka like creation Atari was coming up with next. So I eagerly clicked away at the company profile...
What I found was about as sad as Michael Jackson's nose surgery. The once-great foundation of the video game console industry was in dismal ruins.
They had joined up with the French video game company Infogrames Entertainment and recently brought in a new CEO, 48 year old Bruno Bonnell. They have spent their days developing, marketing, and packaging games for other platforms (PS(2,3,P), Nintendo, Xbox(360), and PC). For a while, they had met some moderate success with games like Driver, the Matrix series, and the newly released Test Drive Unlimited. They haven't really released anything new as far as consoles go, but they did seek to bring back some of their former glory with the Flashback and Flashback 2.0, modeled off of the old 7800 and 2600 consoles, respectively. They have also met moderate success publishing and distributing games for third party developers with titles such as Neverwinter Nights, the Rollercoaster Tycoon series, and the Dragonball Z series.
However, the truth of the matter is that the company is struggling to keep its head above the water. Their last console was the failed Jaguar, they have stayed away from computer systems since the Falcon, the Driver series was sold to Ubisoft, and they haven't shown any promise of turning a profit for years. Their 2006 profit margin is at -31.55% and their stock has been given a "D" rating by ValuePrime. The recent release of the much acclaimed Test Drive Unlimited only managed to raise the stock a few cents for a day or two before it dropped back down. At about $0.60 a share, Nasdaq already has issued a notice of delisting from the Global Market. Atari has sought a hearing, but it would take a miracle for them to meet compliance.
With such a low share cost and such a horrible profit margin, no investment group would even bother to come near their stock. In a recent letter to its shareholders (.doc warning), CEO Bonnell confesses that the company is in debt up to its ears (over $750 million) and resorts to publicly begging for investors not to lose trust and dump in more cash. He is also calling on the favors of old associates, trying to use its once great name as leverage. However, the stock has been falling steadily over the past couple years, now at a rate of a few cents a day.
While Atari's rise and fall hasn't been as quick as M.C. Hammer's, it is still a sad sight to see. The once great name of the video game industry is standing on the corner with rabbit-eared pockets rattling a tin can, remembering its glory days and knocking on the doors of its former friends looking for handouts. One of their old ad slogans used to read "Atari means more than fun and games. Atari means money." Nowadays, it means a lack of it.