DDGC - The Atari Situation Part 1

February 25, 2006

My new posts about video games are partially inspired by Atari's current financial woes and their plan to sell off their internal studios. See, I used to work at one of these internal studios, Melbourne House. I spent 5 years there before being poached/headhunted, and I have to say that this intended sell-off is not suprising - perhaps even expected.

Before I get to the nitty-gritty, I'd like to explain how Atari got into the position that it is in now. Infogrames, a French games company who started back during the 8-Bit computer days, borrowed a lot of money around the turn of the millennium and proceeded on a binge of developer and distributor acquisitions. This got them very big, very fast. During this binge, they bought, amongst others, Melbourne House (Australia's oldest developer) and Hasbro Interactive - the latter of whom owned the Atari name. Originally intending to brand their 'premium' titles under the Atari banner, they instead decided to rename the entire company and ride the publicity and brand recognition train. Note that Atari is a U.S. subsidary of Infogrames, which does not trade under the Atari name in France.

Now, renaming oneself to cash-in on a brand is a fairly good business decision, especially when people have difficulty remembering your name ("Info-games?") The problem is that Atari just had a bad run of luck. I mean, who was to know that The Matrix Reloaded would ruined the entire franchise? That's the risk you have when you do a movie tie-in. And the sour taste that DRIV3R left behind should have buried that series too.

It's more than luck, however. The simple fact is, Atari is better at publishing than it is at developing. And it's this publishing success that tainted the way they went about doing internal projects.
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