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.

This week, Gazillion Entertainment announced that David Brevik would be placed as studio director at Gargantuan, the studio house developing the Marvel massive multiplayer online game. After originally being scrapped by Cryptic Studios in favor of Champions Online, Gazillion entertainment had been filling its ranks up under the weather by recruiting members of Apple, Blizzard, Pixar and Microsoft Game Studios to create their team.

Now with the addition of David Brevik who has been credited as leader programmer, project lead and design lead of both Diablo games, gamers should feel confident in the studio’s ability to deliver on the multiplayer experience required for a quality MMO. But can the Marvel Universe MMOG survive in a landscape already dominated by the behemoth World of Warcraft. Other properties like the Age of Conan, Lord of the Rings and Warhammer have taken shots at unseating Warcraft but have thus been unsuccessful.

Even other strong properties outside of the medievil time frame have fallen short like the ill-fated Star Wars Galaxies and the Matrix Online. What may be Marvel’s biggest threats though come from the blossoming superhero MMOG genre that has been popping up over recent years, the pinnacle being City of Heroes/City of Villains which came in to legal trouble with Marvel and DC for such robust character creation tools that many players were able to create incredible likenesses of their favorite proprietary heroes.