Atari 2009 Annual Report Download - page 15

ANNUAL FINANCIAL REPORT – REGISTRATION DOCUMENT
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Principal capital projects completed during the fiscal year end ed March 31, 2009: included continued
investments by the Group in the development of major titles released during the year or scheduled for release this year
including Legendary, Test Drive Unlimited 2, Alone in the Dark on the PS3, Champions Online, Star Trek Online, My
Horse & Me 2, Ready 2 Rumble, The Chronicles of Riddick: Assault on Dark Athena, Ghostbusters and NeverWinter
Nights 2, expansion pack 2. These investments have been financed either with the Company‟s own cash and/or through
the use of credit facilities. In fiscal year 2008-2009, the Group‟s research and development expenditures amounted to
€42.0 million.
In October 2008, Atari purchased the Atari Inc. shares not yet held by the Company. In December 2008 it acquired
Cryptic Studios Inc. and on this account it acquired games in development (in particular Champions Online and Star Trek
Online) and a game development engine for a total amount of €14 million. These events are described in Note 1 to the
consolidated financial statements. There were no material acquisitions of shareholdings during fiscal years 2006-2007
and 2007-2008.
The Board of Directors‟ report on the Group‟s management, section 2.2, contains detailed information regarding research
and development expenses for the year.
FUTURE PROSPECTS
Information on this topic is included under “Information on management and the financial statements” in subsection 12 on
“Company prospects”.
RISK EXPOSURE
In the course of its business, the Group faces risks which could have a material adverse effect on the Company, its
business, financial position or income. The main risks identified by the Company are reviewed in section 8 of the Board
of Directors' report on the Group‟s management. This review should not be considered exhaustive as other risks, not yet
identified or not considered material by Atari when this report was filed may also have a material adverse effect.
Investors should take such risks into consideration before deciding to subscribe for or acquire the Company‟s shares.
OTHER RISKS
To the best of the Company's knowledge, no specific factors other than those referred to in section 8 of the Board of
Directors‟ report on the Group‟s management are likely to have a material impact on its business.
MEASURES TAKEN TO PROTECT THE BUSINESS
PROTECTION OF INTELLECTUAL PROPERTY
In order to minimize its exposure to the above risks and to maintain a relationship of trust with its partners, the Group has
implemented procedures for formalizing and validating all production and operating steps for individual products, from
both a legal and a technical standpoint. An international team of specialized lawyers in Europe and the United States
looks after the management, oversight and acquisition of intellectual property by the Group, which also works with
leading copyright law firms. Where appropriate, the Group registers its product names and copyrights in as many
countries as possible, besides Europe and the United States. In addition, all console manufacturers incorporate
protective features in their systems to prevent unlicensed usage.
A pragmatic approach to fighting piracy is used, based on the degree of risk exposure and the countries concerned. In
France and elsewhere in Europe, Atari works closely with the anti-piracy unit set up by institutions such as SELL (the
French association of entertainment software manufacturers), the Entertainment Leisure Software Publishing Association
(ELSPA) and customs authorities.
The Group works with customs authorities in the US in the fight against piracy and with specialized companies to fight
against unlawful downloading of its products.
Furthermore, its products incorporate software designed to prevent unlawful duplication.
The Group does not file patents for its games and its business does not depend on a specific patent.
SUPPLY SHORTAGES
The Group seeks to reduce the risk of supply shortages by diversifying its manufacturing sources. In the case of products
for PCs (22% of the Group‟s sales worldwide as of March 31, 2009), the risk is limited due to the large number of
manufacturing companies in Europe and the United States and their adaptability. On the other hand, the Group does not
have control over the manufacture of products for proprietary platforms, as this is an area in which console