Atari Inc. in New Trouble

There are some game companies that never seem to get a break when they need it, former industry icons that have fallen from their top position and are slowly trying to pick up the pieces and create something new from the glory of old.

Atari is such a company. After the arcade success it has enjoyed between 1980 and roughly 1990, Atari lost its way and had tremendous financial troubles, which culminated in the sale of several of its best known intellectual properties.

When the mist cleared, Infogrames, a French-based company, had acquired the rights to use the Atari name in Europe and Asia, as well as market several titles based on old Atari games. In North America however, the Atari Inc. company still remains the holder of the Atari name, altough it has recently been hit by numerous financial issues.

A few weeks ago, Infogrames brought in two industry veterans, Phil Harrison from Sony as president and David Gardner from Electronic Arts as Chief Executive Officer. Their main mission would be to revitalize Atari and make it one of the big players in the game industry, with a focus on easy to pick up and play games and an Internet-based approach to gaming communities. Their first move was to launch an offer to pick up all the stock issued by Atari Inc. of America so that the company could be made private and incorporated in Infogrames.

The move now seems threatened as Atari was served with a notice from NASDAQ that its shares could be delisted as the results of lack of compliance with market regulations. Atari Inc. should have reported a company value of more than 15 million dollars on at least ten consecutive days until March 20. It failed to do so. If the shares are delisted from NASDAQ, it will be harder for Infogrames to pick up those shares and there's a real chance that Atari could see more financial trouble and even file for bankruptcy.