Atari Files for Bankruptcy, Separates from French Parent Co.

In a story broken by Ben Fritz of the L.A. Times, it was reported late last night that legendary game developer Atari Inc. has filed for bankruptcy.

The initial report suggests that U.S. operations will cease while the company attempts to separate from their parent company, the France-based Atari SA. Fritz’s report also indicates that Atari Inc. is looking for a private buyer.

This is another blow to the once-great developer, who rose to prominence with their Atari 2600 console. The 2600 spend six years on top of the console world until market saturation sunk in. Atari is widely considered to have been the catalyst behind the Video Game Crash of 1983, producing historically notable bombs such as E.T. and their notoriously bad port of Pac Man.

The next decade following the crash was no more kind to Atari. Their late-80s home computers failed to catch on due to stiff competition from Apple and other hardware distributors. In 1989 they entered (and swiftly exited) the portable console market with the Atari Lynx. Their low point finally hit in 1993 with the release of the much-criticized Jaguar home console.

Atari company itself has gone through many sales and regime changes over its 40-year history.  Starting with its sale to Warner Communications in 1976, the company has changed hands from Warner to Namco, then Hasbro, until finally being acquired by Atari SA (formerly Infogrames, of Alone in the Dark fame) in 2001.

With Atari itself bankrupt and potentially separated from its parent company, the name and legacy of Atari is primed and ready for a motivated buyer. The recent popularity of retro gaming, the strength of the Atari brand, and the right combination of behind-the-scenes professionals could bring the company back to its former glory.