Entertainment Bankruptcy

Retrieved from http://www.polygon.com/2013/1/21/3898906/atari-u-s-files-for-bankruptcy

Obviously, the financial crisis has been hard on all industries.  Entertainment is no exception.  Unfortunately, many companies have been unable to hold up during this ongoing economic depression and bankruptcy announcements are not unexpected these days.  One that did confuse me, however, was the game system Atari.  I wasn’t surprised to read that they had filed for a Chapter 11 bankruptcy, but that it happened now and not twenty years ago. 

       I was shocked that Atari still existed.  Atari was one of the first companies to produce arcade, and personal, video game consoles.  They started in 1972, and were responsible for some of the most popular early games, like Pong and Centipede. 

        Atari was never able to replicate their early success in later decades though.  The company changed ownership many times, and suffered from a general lack of leadership.  When other companies like Nintendo started producing newer and more technologically advanced products, Atari fell behind.  They never learned how to survive over time.  Today we have companies like Xbox and PlayStation that continually put out new products, and newer versions of their gaming consoles.  They stay current with technology and trends.  Atari exists now only to reproduce the same games from forty years ago, in a new format.  Arcade games such as Asteroids and Combat can now be played online, or on a smartphone.

Retrieved from http://news.cnet.com/8301-1023_3-57565005-93/ataris-u.s-arm-files-for-chapter-11-bankruptcy-protection/

Atari filed for bankruptcy early on Monday morning.  They are currently owned by a French parent company that has reportedly not made a profit since 1999.  While the American branch has apparently been making a small profit on their digital games division, they cannot receive any kind of funding or get out of debt while still under the French company.  Filing for bankruptcy is their attempt to separate their assets from the French Atari S.A. and be allowed to grow as a company.  “The Chapter 11 process constitutes the most strategic option for Atari’s U.S. operations, as they look to preserve their inherent value and unlock revenue potential unrealized.”  The French parent company has also filed for relief under French law.