Atari Announces Reduced Loss, Humongous To Be 'Divested'

Video game publisher and developer Atari, the U.S. subsidiary of French-headquartered Infogrames, has announced its fourth quarter and fiscal 2005 results, and has managed to reduce its quarterly loss to $9.1 million, down from a loss of $17.3 million, but a figure that was nonetheless weaker than analyst estimates. Net revenue for the quarter was marginally reduced, down to $62.7 million from $64.8 million the previous year. The company also revealed that it intends to 'divest' its Seattle-based Humongous Entertainment studio, the creators of the Backyard Sports kids game franchise, by the end of the 2006 fiscal year (March 31st, 2006.) However, the company's official statement was unclear on whether this divestiture is going to be in the form of a sale of simply involves the studio's imminent closure. Atari's recent difficulties have included the resignation of CEO and president James Caparro, after less than 7 months in charge of the company, a time in which he presided over the closing of Atari offices in Santa Monica, California, and Beverly, Massachusetts. Revenue for this latest quarter was driven by Atari's key Dragon Ball Z license, and the release of Dragon Ball Z: Sagas (PS2, Xbox and GameCube), as well as continued sales of Dragon Ball Z: Budokai 3 (PS2) and the Atari Flashback Classic Game Console. In relation to the results, interim Atari CEO (and Infogrames founder) Bruno Bonnell commented: "Fiscal 2006 will be a year of focus at Atari. We will be releasing fewer SKUs in fiscal 2006 than in fiscal 2005. By improving our business processes in order to release higher quality products on time and on budget and creating comprehensive global market initiatives to support them, we will be taking better advantage of our assets." Going forward, major titles for the next Atari fiscal year include Dragon Ball Z Budokai: Tenkaichi (PS2), the Turbine co-produced Dungeons & Dragons Online (PC), RollerCoaster Tycoon 3: Soaked (PC), and a particularly key release, The Matrix: Path of Neo (PS2, Xbox and PC), but the company, which also renegotiated its Hasbro Interactive licensing deal recently, has not yet released predictions for the 2006 fiscal year.