Atari Financial Report Haven't even opened it yet... time to pour a cup of coffee. $ALATA $PONGF

[PowerDubs]

https://atari-investisseurs.fr/wp-content/uploads/2023/12/ATARI_HY-23-24_Financial-Report_DEF.pdf

[82-T/A]

35 minutes ago, PowerDubs said:

https://atari-investisseurs.fr/wp-content/uploads/2023/12/ATARI_HY-23-24_Financial-Report_DEF.pdf

 

Well... it's not great. But I'm certainly doing what I can to help it succeed.

[PowerDubs]

It's what I expected-

 

Gross rev up (substantially)

 

Net down due to spending / building.

 

Of note-

 

PG8- Rev does NOT include 2600+ pre orders

 

PG 21- Atari holds 53% of Playmaji? How is that a minority investment?

 

Still reading......

[PowerDubs]

I kept reading- Atari holds a non-controlling stake of 53% on a non-diluted basis and 49% on a fully diluted basis

[Nall3k]

From what I understand, they have increased debt from the acquisitions, but the acquisitions like Nightdive are increasing the revenue. I think the 2600+ will definitely help on the revenue side, but for games, Atari needs to produce and make more games like Atari 50, or more along the lines of Nightdive's System Shock. The indie level games like Days of Doom, or the Recharged lineup just don't seem to be selling.

2024 will be a make or break for the company in my opinion. Continued success of the 2600+, System Shock release for consoles, and hopefully Atari starts releasing titles that are beyond "indie" category.

Edited December 11, 2023 by Nall3k

[PowerDubs]

Lots going on.

 

By holding 2600+ revenue off the results until next period, and holding back the System Shock console release- it makes this period #'s seem worse.  (as it is- most people will overlook gross rev being up approx 50%)

 

Atari voted in Sept to do a share buy back and burn- which means they would want the stock price to be as low as possible to do that.

 

If they are going to do it- I'd expect it soon.

 

Also of note- All the way at the bottom- page 29- "The accounting treatment of the ATRI Token recognized in Atari
financial statements will be revised at the occasion of Atari annual results for the period ending March 31,
2024. "    Which is convenient since their self imposed limit before selling them expires next week.  😛

[Lord Mushroom]

It looks to me like Wade is running Atari into the ground.

[Nall3k]

14 minutes ago, Lord Mushroom said:

It looks to me like Wade is running Atari into the ground.

I wouldn't go that far. I think the short term loss is potentially setting up a long term revival. The right moves are being made with acquisitions, of course, Atari had to take on the debt to make those acquisitions. But, considering he took over when a lot of valuable IP had been sold and the focus was on crypto... We'll see.

[Warboss Gegguz]

I'll chime in as an Econ/Business major here.

 

Given the sheer number of major acquisitions this year alone, I wouldn't expect HUGE returns. That said, we're going off of everything pre-4th quarter, which in other industries might be fine. But in the video game and toy industry, 4th quarter is basically where you get the bulk of revenue since it's holiday shopping season. So this not having late-Oct. to early-Dec. isn't gonna paint the greatest picture. That effectively leaves out the main preorder and delivery periods for the 2600+, as well as some key titles like Turok 3 Remastered. 

 

Ultimately though, I'd say just don't expect wild profits because the acquisition of Digital Eclipse and NightDive are effectively long-term investments. The payoff isn't gonna be immediate.

Honestly my only real critique of how atari is being run in terms of is that they should GTFO of the crypto market because it was stupid to get involved to begin with. Probably paid off initially in the short term (as one would expect from a bubble) but now it's just dead-weight and hurts the brand image to most people.

 

TL;DR this years report will probably be a case of "Gotta spend money to make money."

Atari wants to get back into the publishing industry, and with the way the European market is with once-giants like Ubisoft crumbling, embracer floundering, and smaller groups like Focus, Nacon, etc. rising from the ashes, it's the perfect time to do so... but that's a long term commitment.

[Warboss Gegguz]

12 minutes ago, Nall3k said:

But, considering he took over when a lot of valuable IP had been sold and the focus was on crypto... We'll see.

This. I have no qualms saying that Atari was comically mismanaged under prior leadership. To the point that the company was basically just selling their logo to stay afloat (see Atari hotel). Things that paid off in the short term but contributed nothing sustainable while also shifting focus away from their core market.

Kind of reminiscent of Konami honestly, which is not a good thing. But in Atari's case, they didn't have the benefit of having multiple revenue streams like Konami does. They basically just did everything BUT work in the video game market outside of compilations and the recharged games. So while their ROI may have looked better on paper, they were effectively barely staying afloat.

 

the VCS, recent releases, interaction with the community, and overall shift back to ACTUAL video games have turned things around, but allow me to say bluntly that most investors are fucking stupid and have the patience of a toddler so they're gonna see "numbers not go up!" and call for blood. Especially if they're unfamiliar with how this market actually works. I imagine cooler heads will prevail, but I'm just saying expect a lot of excessive negativity. 

 

90% of economic and business issues are the result of people wanting long-term scale returns in the short-term.

[Warboss Gegguz]

On 12/11/2023 at 9:18 AM, Nall3k said:

hopefully Atari starts releasing titles that are beyond "indie" category.

The problem is that extrapolating arcade titles into something beyond a small scale ~$5-$10 download is really hard, and EVERY arcade company of old has realized that and either shifted focus a while ago or sticks to the small scale market (or a bit of both).  The best comparison I can really think of is Taito, who basically don't put out anything beyond a few indie-scale projects and rereleases. The only difference is they have the benefit of being backed by Squenix, which Atari doesn't have. They're flying solo. They're good enough to keep the lights on, but I'd imagine part of the goal of Acquiring nightdive in particular was to have a studio capable of branching out into larger projects.

 

Note that basically none of Atari's library since bankruptcy has been developed in house or by an in-house studio. The recharged line and even the Vault/Flashback comps were external. This is fine for arcadey stuff, but if you have grander aspirations you're gonna wanna have something more consistent.

Likewise, Atari needs devs that are skilled in working with old hardware and games because they have a HUGE legacy library, which both NightDive and ESPECIALLY Digital Eclipse are extremely well-versed in.

 

In other words, they need muscle to go beyond their current scope, and the only way to do that is by getting new hands on deck. Again, "spend money to make money" situation.

As someone who openly disliked the Atari of the mid-2000s to mid-late 2010s, I think the current management is far more competent, but again people want kneejerk quick ROI.

[Warboss Gegguz]

Also, I just wanna note with this thread's title: most companies don't compile Q4/end-of-year reports until, ya know, the end of the year/quarter, so not being able to find q4 reports isn't like a "bad omen".

It's kind of weird to expect them before January, but OP kind of has a pessimism streak so I'm not shocked

Edited December 13, 2023 by Warboss Gegguz

[Lord Mushroom]

7 minutes ago, Nall3k said:

I wouldn't go that far. I think the short term loss is potentially setting up a long term revival. The right moves are being made with acquisitions, of course, Atari had to take on the debt to make those acquisitions. But, considering he took over when a lot of valuable IP had been sold and the focus was on crypto... We'll see.

He has had some time to turn things around. They should have been at least near break even now, in my opinion. Losses were $5 million before debt payments. I used to be optimistic about Atari under Wade, but now I am pessimistic.

[Lord Mushroom]

44 minutes ago, Warboss Gegguz said:

But in the video game and toy industry, 4th quarter is basically where you get the bulk of revenue since it's holiday shopping season.

True, but I would think that applies less to Atari´s products. Some of their products are downloads, which are not popular Christmas gifts. And Atari´s target demographic isn´t kids anymore. Atari´s customers buy things for themselves. They do have the 2600+ coming up, though.

[Giles N]

5 hours ago, Lord Mushroom said:

He has had some time to turn things around. They should have been at least near break even now, in my opinion.

What do you think should’ve been done different?

 

I mean, - if I understand things correctly -, it’s quite a while since they went with steady surplus, isn’t it?

 

They’ve been on minus for a while, and in one way or another one have to close in to that ‘break even’-point.

If you think they should’ve been there already, could be interesting to hear what you think they’ve done wrong, and what they should’ve done instead?

 

 

Edited December 13, 2023 by Giles N

[82-T/A]

6 hours ago, Lord Mushroom said:

It looks to me like Wade is running Atari into the ground.

No, respectfully, I don't think this is fair.

 

 

I have my gripes about some of the things that Atari is doing (the way they're handling some things), but beyond that, I think Wade is doing all the right things. It takes a lot of work and a lot of effort to revive a major company like Atari (was). I think he's really engaging the "base" by releasing products that provide real interest to the people who WANT to relieve their childhood, while at the same time positioning Atari for a possible long-term future by not only buying back IP, but new IP in organizations like Night Dive Studios, etc.

 

He does not have an easy job, but he's clearly investing a lot of his own time, effort, and money into Atari... which speaks volumes about what you'd want to see from a good CEO. I can show you plenty of bad CEOs, like the CEO of Sears / K-Mart, which kept the brand around long enough to sell off and enrich himself through the sale of valuable real estate... or the former CEO of Kodak... that didn't adapt to change and saw an industry that they created, evaporate before their very eyes.

[Lord Mushroom]

1 hour ago, Giles N said:

What do you think should’ve been done different?

It is hard to say because we don´t have access to their internal figures, so we don´t know what they are making money on, and what they are losing money on. I do suspect Wade wilfully starts projects that are unlikely to be profitable, simply because he thnks they are cool. They shouldn´t do that.

 

Another thing they should have done differently is focusing more on licensing. Licensing revenue is very low now, but was high under Chesnais. They should have continued Chesnais´efforts in that area, just with quality control. 

 

I also don´t think they should have made all those purchases they have made. With the exception of the one they bought on auction, I think they were all unprofitable investments.

 

Bottom line, any (expected) profitable ideas that don´t hurt the brand should have been done, and nothing else. At worst, that could mean just licensing, but it is better to make a small profit than a loss.

[Lord Mushroom]

1 hour ago, 82-T/A said:

he's clearly investing a lot of his own time, effort, and money into Atari... which speaks volumes about what you'd want to see from a good CEO. 

That is one way of looking at it. An alternative view is that he is using his dad´s money to buy and play with toys. The proof is in the pudding, and the pudding is the financial results. It is too soon to say whether or not Wade Rosen´s Atari is a failure, but early signs are bad.

[Nall3k]

27 minutes ago, Lord Mushroom said:

Another thing they should have done differently is focusing more on licensing. Licensing revenue is very low now, but was high under Chesnais. They should have continued Chesnais´efforts in that area, just with quality control. 

It was high under Chesnais because he was licensing out to pretty much anything, even if it diluted the brand. 

[Lord Mushroom]

19 minutes ago, Nall3k said:

It was high under Chesnais because he was licensing out to pretty much anything, even if it diluted the brand. 

It wouldn´t have been as high as it was with quality control, but it would still be high. They got over $3 million for the hotels. They got a lot of flak for that, but I think that is due to other licensing deals preceeding it, like the speakerhat. If people weren´t used to shitty Atari licensed products, they would think Atari hotels sounded cool.

 

And some of the low quality deals that were made, could still have been made with changes. Atari could have made sure the first Flashbacks were at least ok. It would probably not have been as profitable, but they would have received something.

Edited December 13, 2023 by Lord Mushroom

[Nall3k]

30 minutes ago, Lord Mushroom said:

It wouldn´t have been as high as it was with quality control, but it would still be high. They got over $3 million for the hotels. They got a lot of flak for that, but I think that is due to other licensing deals preceeding it, like the speakerhat. If people weren´t used to shitty Atari licensed products, they would think Atari hotels sounded cool.

 

And some of the low quality deals that were made, could still have been made with changes. Atari could have made sure the first Flashbacks were at least ok. It would probably not have been as profitable, but they would have received something.

I think for the next financial result, we'll see a much better financial situation as it will account for the Atari 2600+ sales (over 50,000+ for the console alone), System Shock release on consoles, Turok + more Nightdive, Digital Eclipse game sales).

This report looked bad because it stopped at September.

[Warboss Gegguz]

8 hours ago, Lord Mushroom said:

True, but I would think that applies less to Atari´s products. Some of their products are downloads, which are not popular Christmas gifts. And Atari´s target demographic isn´t kids anymore. Atari´s customers buy things for themselves. They do have the 2600+ coming up, though.

You're neglecting the fact that things like Steam the sales that happen in late November and December MASSIVELY drive up sales. Not to mention gifts don't have to be exclusive to children, lol.

And that applies to both recent releases and Night Dive and DE's libraries in general. So there's plenty of ways to make major returns end of Q4.

I'm not gonna suck the guy off since I've only recently become reinterested in the fate of modern Atari but the current output, direction, and overall sentiment towards the company have greatly improved. and that's primarily been within the last few years. And when I say "last few years" I mean like 2021 onwards... which is both funny, but also a surprising turn-around of PR and direction in such a short time.

 

The choices of studios to acquire was also clearly thought out, since DE and ND are both relatively small and specialize in ports of classic games and games made with a "retro-mindset". Not to mention the success of Blood: Fresh Supply and Atari 50 probably helped quite a bit. So as investments, having 2 studios that can port their classic library and the libraries of other companies (in the case of DE 2D games, and in the case of ND 3D games) is a great idea. . So the cost is highly likely to be recouped, especially when ND already had projects in the works pre-acquisition. As far as acquiring Accolade, they were effectively just buying back what they had sold to Tommo in 2013, which is good since their desperation led to them selling a lot of HUGE titles that weren't worth the quick returns (Battlezone probably being the most obvious). The only real acquisition I find odd was Ronimo Games since both of their titles are pretty dead atm, but I imagine that means future plans for the IPs..

 

Basically, this year was a year of priming for future growth and working on reentering the console/games industry after half a decade of it taking a back seat to mobile games and licensing their name and iconography to random crap. The losses were necessary for Atari to have something worthwhile to bring to the table outside of compilations and remakes of Atari Corp. arcade games.

 

As far as their console stuff, the reissues are clearly aimed at collectors while I'd say the original/enhanced games are aimed at more casual audiences who bought a 2600+ or just have an atari lying around. Case in point: the Butcher Billy cart reissues cost more than twice as much as an actual 2600+ and aren't available individually.

That that in mind, I would say a wise idea if they wanna move units would be to make the 2600+ flashcart compatible to increase the broader appeal. and even possibly start selling ROM downloads at a discounted price compared to the physical releases. The team here has openly said the cost of manufacturing makes profit margins on things like Berzerk Enhanced and Mr. Run and Jump super limited, so selling roms to flashcart owners and gamestation owners at maybe a 50% discount would cut out a huge cost. Copy protection would be an issue, but even the return on a few sales would be WAY higher than what they are now.

Edited December 13, 2023 by Warboss Gegguz

[Warboss Gegguz]

1 hour ago, Nall3k said:

I think for the next financial result, we'll see a much better financial situation as it will account for the Atari 2600+ sales (over 50,000+ for the console alone), System Shock release on consoles, Turok + more Nightdive, Digital Eclipse game sales).

This report looked bad because it stopped at September.

Atari's best decision since 2021 has to have been to STOP divesting so much outside of gaming. Like, mobile stuff I could get since that's hugely profitable and arcade games are good for quick little "pick up and play" experiences, but the crap like hotels and crypto are comically absurd and were never likely to make any returns. The VCs... I'm extremely mixed on. I don't hate it, but (and I apologize if this upsets anyone) I do think it's kind of dead-weight for the company at this point. It's not Ouya/Micro-console levels of bad, but it's also not got that much to offer unless you're a huge retro fan. And if you ARE a huge retro fan, you likely already have ways to play these games just as well as the VCS (eg. Me).

 

The 2600+, if nothing else, has novelty, collector, and casual appeal on its side. The VCS is marketed at the hardcore audience, and no one in that audience is gonna buy a neutered Linux PC over just buying the games on other platforms and/or using stella on their PCs. The appeal is so limited, and making games exclusive would just make returns laughable vs. making them multi-plat. 

Edited December 13, 2023 by Warboss Gegguz

[Flojomojo]

Page 8

Quote

Hardware: Hardware revenues for the period represent €0.5M compared to €0.2M in the previous period. This evolution is driven by the implementation of new commercial strategy and content expansion for the VCS, and successful Atari XP cartridges releases which saw positive market reaction, and AtariAge contribution to a lesser extent. This does not include revenues from Atari 2600+ pre orders, announced in August 2023, that are expected to contribute in the second half of the fiscal year.

Should I take that to mean AtariAge homebrews and collectors edition cartridges brought in twice as much revenue as Atari VCS (the mini PC) did the previous period? How much longer will Atari realistically choose to support that platform? 

[Nall3k]

Just now, Flojomojo said:

Page 8

Should I take that to mean AtariAge homebrews and collectors edition cartridges brought in twice as much revenue as Atari VCS (the mini PC) did the previous period? How much longer will Atari realistically choose to support that platform? 

I would suspect they are going to sell what remaining stock they have, and maybe release games until the end of 2024. That would be a four year run, which is decent for a micro console that doubles as a PC device.