Atari Financial Trouble

It’s Atari’s turn to shed light on their darkest pages of account books. What do we see? TheStreet.com, Motley Fool and Reuters, they all play very moody concerto for Atari. Basically everything went to nuts - revenue tanked, margins dropped and titles had lapses.

Atari introduced a new kind of portfolio thinking. They will focus on improving returns for invested capital. Sounds clever, they have some nice product brands like Dragon Ball Z, Yu Yu Hakusho, Magic The Gathering, Beyblade etc. in their stables.

I guess that this new strategy of focus on returns means that they try to develop present product lines, especially those franchises that they paid for a good price. They have high costs related to marketing and distribution i.e. selling the games, but very little to show for as results.

Now RollerCoaster Tycoon is a nice game, it has no other content related products to support the brand image, but still this series is doing well. There hope is to match good game with good content brand.

Finally this financial slacking of Atari is also very bad news for Infogrames, because Atari is its subsidiary. Infogrames is already in trouble and has to scrape every penny it finds. See how this affects to Atari, there is no talk about reinvestment. Atari just claims to aim for better management of operations.