The US arm of the video game company that created massive gaming hits like “Pong” filed for Chapter 11 bankruptcy today, hoping that the move will help to split them from their French owners. Things like the company logo and other associated brands have been put up as viable assets so that the company can, as they put it in a written statement, “secure independent capital for future growth, primarily in the areas of digital and mobile games.”
Atari and Chapter 11
Even a history of gaming hits like “Pong,” “Centipede,” and “Dig Dug” couldn’t save Atari’s US arm from bankruptcy, as the gaming world has moved on quite a bit since Atari’s heyday. Even the company’s biggest gaming machines from that era are now regarded as fun collectibles for oddly specific programmers in the computer world.
To save themselves from previous bouts of potential bankruptcy, Atari was purchased by French gaming company Infogrames Entertainment in 2008, following up that company’s decision to buy a major stake in Atari eight years earlier.
The New York based arm of the re-named Atari S.A. plans to continue doing business during the bankruptcy proceedings, as is permitted under Chapter 11 filing. They have secured a distressed lending loan of $5 million from Tenor Capital, which will allow their mid-bankruptcy business to continue.
What this means for Infogrames is unclear. Since Atari’s US arm filed for Chapter 11 bankruptcy under the express plan to separate themselves from Infogrames, it would seem like no risk is being undertaken by the French company, but concerns for the health of that gaming firm, especially if Atari’s bankruptcy-boosted plan works, are rising.