Over the past few years, Atari has been having some serious money troubles. Even after releasing an updated version of their classic video game Pong and a "greatest hits" compilation of their biggest arcade titles to date, Atari's revenue has been groundrocketing - with the 2012 fiscal year seeing a 34% loss and the 2011 fiscal year seeing a 43% loss. Their yearly profits haven't been very good either, with the company having only earned $11 million in 2012 and $4 million in 2011.
And it's due to their financial struggle that Atari S.A.'s U.S. subsidiary, Atari, Inc., has just filed for Chapter 11 Bankruptcy in U.S. Bankruptcy Court in New York late Sunday, according to the L.A. Times.The company, as well as three of its affiliates, filed petitions for Chapter 11 reorganization in an effort to break free from the shackles of debt their French parent company has acquired. The company's intention, so says a source close to the L.A. Times, is to go on after the bankruptcy goes through, hopefully reemerging with its own resources and with little of the debt of its parent company, to find a buyer who will take the company private and grow as a business that focuses more on digital and mobile platforms.
One big reason for Atari taking a big financial hit is thanks to London financial company BlueBay Asset Management, which they relied heavily on for money. After a $28-million credit facility with BlueBay lapsed on Dec. 31, Atari was left without the resources to release games they were working on. And with all that happening, along with shares in Atari S.A. dropping in value from more than 11 Euros in 2008 to less than 1 Euro, it was only a matter of time before the child companies tried breaking away.