Atari 2011 Annual Report Download - page 6

ANNUAL FINANCIAL REPORT – REGISTRATION DOCUMENT
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2. REINFORCING LICENSING AND FRANCHISE REVENUE STREAMS
Atari earns revenue through licensing of games and merchandising to continually leverage Atari’s strong catalogue of
popular games and third party franchises.
Atari benefits from its global brand and extensive catalogue of popular games based on its classic game franchises
(Asteroids, Centipede, Missile Command, Lunar Lander, etc.), original franchises (Test Drive, Backyard Sports, Deer
Hunter, Champions).This unique portfolio of IPs and brands can further contribute to revenues through all type of
licensing deals, notably through games or merchandising.
In addition, Fiscal Year 2011/2012 will be the year of the 40
th
anniversary of Atari, an opportunity for Atari to increase its
brand marketing.
3. CONTINUING TO OPTIMIZE OPERATIONS
The Company focuses on continuing to optimize operations, focusing at this final stage to adapt the overhead and the
Research and Development expenses to Company’s the revenue and product strategy.
To get the most out of available resources and offset a potentially protracted weakness in consumer demand, Atari’s
strategy is closely coordinated with the Company’s strict ongoing cost control which includes:
• Sharp reductions in overhead expenses, driven primarily by further staff reductions and reorganization, mainly
at the corporate and publishing level;
• Significant reduction in Research and Development expenses, including a drastic reorganization of its in-house
development studios;
• The streamlining of the Group’s offices worldwide.
Through these essential actions, Atari’s aims to sustainably align its revenues and expenses.
4. SETTING UP PARTNERSHIPS TO ENSURE THE COMPANY'S DEVELOPMENT
The Company is constantly exploring opportunities to develop commercial partnerships in order to derive maximum
benefit from its large portfolio of intellectual properties, its brand and all of its assets. Examples include the licensing out
of owned or controlled IP, entering into distribution or co-publishing arrangements related to owned or controlled games,
and distribution or co-publishing arrangements of third party games.
HISTORY
Infogrames was created in 1983 and began trading shares on the Second Marché of the Paris stock market in 1993. In
1996 it moved to the Premier Marché, embarked on a major acquisition program (incl. GT Interactive, Eden Studio etc…)
and developed its portfolio of licenses. Starting in 2003, the Group initiated multiple restructuring programs and worked
on the restructuring of its debt.
In 2001, Infogrames acquired Atari Inc. (pioneer of the video game industry founded in 1972). In 2008, the Company
restructured its US subsidiary and purchases in cash all Atari Inc. shares it does not already own, making Atari Inc. a
wholly-owned subsidiary.
In 2009 the Group started its strategic turnaround, with increase emphasis on online and the development of less but
more profitable retail games. In January, the Group issued bonds convertible into new or existing shares with warrants
attached (ORANE-BSA) with a nominal value of €40.5 million mainly to finance the acquisition of Cryptic Studios Inc.
announced at the end of 2008 and closed at the beginning of 2009.
The Company continued to evolve towards a content-led games company through Atari Europe’s sale of its remaining
stake in Namco Bandai Partners to Namco Bandai Games Europe, which closed in the summer of 2009. In May, the
Board implemented the Company’s corporate name change from Infogrames Entertainment to Atari and took a
significant impairment of legacy activities.
In January 2010, the Group completed a successful rights issue, raising €43 million, netting approximately €30 million of
cash, after the conversion of a portion of existing debt to equity. Jim Wilson, the CEO of Atari Inc. was appointed to the
Board of Atari S.A. in October, and CEO of the Group in December. The Group’s headquarter was moved from Lyon to
Paris.
In January 2011 Atari decided to accelerate its migration towards becoming a casual, social and mobile games company
with an essentially flexible games development structure, with the aim of finalizing this transformation by the end of the
first half of Fiscal Year 2011/2012. In April it announced the restructuring of Eden Games, its development studio in Lyon