No new Atari Flashbacks?

[foxglove9]

Read this report on IGN last night. Was wondering how it affects the status of the Rev C Flashback and the Flashback 3 console. While the original Flashback was listed in the article, a new flashback was not listed in future products for 2006. Retro products might not be on Atari's mind right now?

 

Full article Link

 

Atari's Future in Question

 

Holiday quarter sales sink, the CFO resigns, and the company doubts its future as a "going concern."

 

by David Adams

 

February 9, 2006

 

Atari reported glum earnings in its third-quarter financials today, showing declining revenues and nearly $5 million in net loss. The company blames delayed titles and an industry-wide slow holiday season for the low numbers. Recent troubles, however -- including the just-announced resignation of Atari's CFO -- leave the company pondering what future it has left.

 

For the third quarter ended December 31, 2005, Atari reports revenues of $100.8 million, a 36 percent decrease from the $156.4 million reported in the same period last year. More dramatically, Atari reports a third-quarter net loss $4.8 million, whereas last year's third quarter saw a net income of $19.6 million.

 

Year-to-date earnings tell a similar story: the company reports nine-month net revenues of $163.4 million versus $332.5 million last year, and a net loss of $62.8 million in the first three quarters, as opposed to a net income of $14.8 million in the same period last year.

 

The company released fewer titles in the third quarter than in previous years. Atari's holiday offerings included Dragon Ball Z: Budokai Tenkaichi for PlayStation 2; Dragon Ball Z: Super Sonic Warriors 2 for Nintendo DS; The Matrix: Path of Neo for PlayStation 2; Xbox, and PC; and the plug-and-play unit Atari Flashback 2.

 

Atari also announced today that Executive Vice President and Chief Financial Officer Diane Baker resigned her position to "pursue other opportunities."

 

Additionally, Atari reports it has lost its credit relationship with HSBC Business Credit due to a default on its revolving credit agreement, though the company also reports no current balance outstanding. Regardless, HSBC may not extend future advances, raising "substantial doubt about the Company's ability to continue as a going concern."

 

Atari says it is taking "definitive steps" to revitalize its business: the company is considering seeking a new credit facility, licensing or selling intellectual properties, and selling development studios. The company will also consider staff reductions. However, Atari warns that these measures may not be enough to address its financial uncertainties.

 

"With the new console cycle now underway, new technologies bring with it new challenges," said Chairman and CEO Bruno Bonnell. "As we anticipated, during the holiday season the industry felt a depressed demand for current generation titles at retail and, as a result, publishers will need to strategically address the marketplace, balancing titles across multiple consoles, as well as portable devices."

 

Atari's major titles for the remainder of fiscal 2006 include Driver: Parallel Lines for PS2 and Xbox, Dungeons and Dragons Online for PC, Dragon Ball Z: Shin Budokai for PSP, and Mark Ecko's Getting Up: Contents Under Pressure for PS2, Xbox, and PC.

 

Looking into the next fiscal year, which begins in April, the company plans to release Alone in the Dark: Near Death Investigation for Xbox 360 and PC, Neverwinter Nights 2 for PC, Battlezone for PSP, TimeShift for Xbox 360 and PC, and Test Drive Unlimited and Stuntman 2 for Xbox 360, among others.

 

"Atari remains committed to providing gamers with titles across all platforms focusing on its largest franchises, including Dragon Ball Z, Driver, Test Drive and Dungeons & Dragons, to name a few," Bonnell said. "Additionally, we will look to increase our marketshare on portable devices such as Nintendo DS and Sony's PSP as the demand for quality titles for these formats continues to grow."

 

The company did not offer an outlook on its fourth quarter or full-year earnings.

[+davidcalgary29]

If they did this, it would be a sure way to kill of the current iteration of the company. The Flashbacks have been two of the few really successfuly products released by Atari/Infogrames in the past two years, and I can't see why they'd now want to cut off 1/3 of their total revenue stream.

[Shawn]

If they did this, it would be a sure way to kill of the current iteration of the company. The Flashbacks have been two of the few really successfuly products released by Atari/Infogrames in the past two years, and I can't see why they'd now want to cut off 1/3 of their total revenue stream.

1016307[/snapback]

 

 

retro has not even made 10 percent of there revenue. PS2 is where they somehow are making 50 percent of it with there shitty titles for the ps2.

[Curt Vendel]

I'm getting bombarded with emails....

 

 

Please everyone I am asking you to stop...

 

 

I am not allowed to make any public/private comments on future Atari Flashback products, sorry.

 

 

 

 

 

Curt

[sku_u]

The company released fewer titles in the third quarter than in previous years. Atari's holiday offerings included Dragon Ball Z: Budokai Tenkaichi for PlayStation 2; Dragon Ball Z: Super Sonic Warriors 2 for Nintendo DS; The Matrix: Path of Neo for PlayStation 2; Xbox, and PC; and the plug-and-play unit Atari Flashback 2.

 

With that lineup, is anyone surprised? The only product that sold well was their FB2, so if they do away with that line, they'll probably lose even more revenue. Talk about a list of duds. Too many companies these days are just trying to ride franchise titles out as far as they can. It gets to a point when it's time to end a franchise and move on to more innovative ideas. Looks like we'll be seeing a videogame recession sometime soon (we'll never see a full on crash again).

[jsoper]

I am not allowed to make any public/private comments on future Atari Flashback products, sorry.

1016323[/snapback]

Yes you are, our CEO does it all the time, even estimates future revenue. It's lots of fun.

Sometimes the stockholders initiate a class action suit when the new stuff doesn't sell, but why let that scare you. It's only money.

[Paranoid]

I'm getting bombarded with emails....

 

 

Please everyone I am asking you to stop...

 

 

I am not allowed to make any public/private comments on future Atari Flashback products, sorry.

 

 

 

 

 

Curt

1016323[/snapback]

 

 

Those pesky NDAs. I figured you were going to get chased down by the villagers with torches and pitchforks sooner or later on one of these threads, Curt...

[Lord Helmet]

Good lord. Please leave Curt alone. Like he has any control over what happens.

[+LS650]

If Curt could say anything, he would. Let him be, folks.

[sku_u]

Let's not turn this into a Curt taunting frenzy. I'm sure he'll update everyone whenever he can.

[kevin242]

A new 8bit system was just too good to be true. I had a feeling Atari was about

to collaspe for the last year. Kudo's to Curt and company for managing to make

the excellent (if slightly flawef) fb 2.0.

 

Since the flashback's were successful and ATari is considering liscensing their prop.

we might still see a FB 3 or another version of the Fb 2. It's still possible.

Edited February 10, 2006 by kevin242

[doctorclu]

I'm getting bombarded with emails....

 

Please everyone I am asking you to stop...

 

I am not allowed to make any public/private comments on future Atari Flashback products, sorry.

 

Curt

1016323[/snapback]

 

I know you are only an advisor and not owner of Atari. Hey, it was cool that one of us got to work with the current Atari and make some "history" happen. I know that was my and many other folks dreams.

 

I love the Flashback 2 controllers, use them all the time, and I hope that somehow Atari can pull forward. They have been the best thing for the Atari name in years.

[Paranoid]

Yeah... I was actually expressing my sympathy for Curt. I knew he was going to get flooded with PMs looking for insider information that he just can't give out (and he is probably as in the dark as the rest of us, more or less).

 

I did go out and pick up two more FB2s today that I hid away in my closet for a rainy day. The Atari FB2 speculation frenzy begins. My hope is that the supply remains strong and this purchase was in vain.

 

But you know... a commercial RUN on the FB2 could be good news for Atari that might help them with their investors... so, everyone should rush out and clear their Walmarts of all the FB2 inventory they have left. And besides... it beats paying $20 plus S/H for used Atari sticks on eBay.

[Bakasama]

This is just great, I've been waiting for the rev Cs to come out and this happens. I guess I gotta go to the store and get the rev Bs before the hammer falls.

[NovaXpress]

But you know... a commercial RUN on the FB2 could be good news for Atari that might help them with their investors... so, everyone should rush out and clear their Walmarts of all the FB2 inventory they have left. And besides... it beats paying $20 plus S/H for used Atari sticks on eBay.

This would do nothing. It doesn't matter how many units people buy from WalMart. What matters is how many units WalMart buys from Atari. And despite what we'd all like to believe, the Flashback was not a smashing success that could turn Atari's fortunes around. The Flashback was just a nice bonus, a profitable little niche item. The retro market as a whole accounted for less than 10% of Atari's sales.

 

When it comes to the classics, Atari's (limited) future is in the portable market. They'll be releasing Battlezone for the PSP this spring if they survive that long. I'm betting that the sale of classic properties is the only way that Infogrames can survive the year.

 

Atari has released a lot of forward-looking statements over the past two days. The Flashback 3 is not on any one of them. This shows their limited way of thinking, because the Flashback was the right direction for Atari. A well-promoted Flashback 3 would also be a commercial for playing Atari games on cell phones, online services and the like. I hope that the next copyright owner understands.

Edited February 11, 2006 by NovaXpress

[Paranoid]

But you know... a commercial RUN on the FB2 could be good news for Atari that might help them with their investors... so, everyone should rush out and clear their Walmarts of all the FB2 inventory they have left. And besides... it beats paying $20 plus S/H for used Atari sticks on eBay.

This would do nothing. It doesn't matter how many units people buy from WalMart. What matters is how many units WalMart buys from Atari. And despite what we'd all like to believe, the Flashback was not a smashing success that could turn Atari's fortunes around. The Flashback was just a nice bonus, a profitable little niche item. The retro market as a whole accounted for less than 10% of Atari's sales.

 

When it comes to the classics, Atari's (limited) future is in the portable market. They'll be releasing Battlezone for the PSP this spring if they survive that long. I'm betting that the sale of classic properties is the only way that Infogrames can survive the year.

 

Atari has released a lot of forward-looking statements over the past two days. The Flashback 3 is not on any one of them. This shows their limited way of thinking, because the Flashback was the right direction for Atari. A well-promoted Flashback 3 would also be a commercial for playing Atari games on cell phones, online services and the like. I hope that the next copyright owner understands.

1016775[/snapback]

 

Listen... I completely agree...

 

A hot run at WalMart (and where ever else) isn't going to get the attention of the Walmart management? They're going to go, "This thing is selling hot. Get some more of those puppies"...

 

If several large chains were responding that way... well... that might get Atari's attention. At the *very* least... super hot sales of this toy could get some press that could generate investor interest.

 

I don't care WHO owns Atari... at all. I simply care that where ever the name ends up, those in charge realize that the right direction is items like the Flashback 2. You're right... the fact that the FB2 only accounted for 10% of their sales last year shows that they're not focusing on the right items... the right advertising, the right cash-cow that is right under their nose. They want to play in an oversaturated modern console game market that *is* ripe for a mini-shakeout. And in that sense, we can consider Atari the original canary in the coal mine.

 

I think with a large, clear advertising campaign aimed at "family gaming" the Flashback 2 could have been the Must Have toy for the last holiday season. The kids who grew up with 2600s ALL have families now... and families are always looking for family oriented gifts. Show some kid alone playing with his xBox or PS2... show a kid playing alone with a Jakks type controller, getting frustrated with how bad it is... then show a whole family sitting around a TV laughing and having a blast playing Warlords... you know... during the middle of Desperate Housewives, and all the Home Remodel and Fashion shows... and every 30-something mother/hosuewife in America would have been running out to get one.

[nathanallan]

I mailed a letter to the company (yes, a paper letter) suggesting my ideas for the FB3. I hope that they do stay afloat and make lots of money cause I really like the FB2!

 

So Curt, watch for my letter to come in the mail.

 

Some of my ideas included "hidden" features for us, like a cart slot and an expansion slot for homebrewers. Keyboard capability. The slot would be for things like ethernet and whatever else. But the keyboard capability was the biggest thing I wrote about.

 

Someone said in another post somewhere, a paper letter is worth more than a hundred emails. I wrote a paper letter. I hope it flies.

[NovaXpress]

A hot run at WalMart (and where ever else) isn't going to get the attention of the Walmart management? They're going to go, "This thing is selling hot. Get some more of those puppies"... If several large chains were responding that way... well... that might get Atari's attention. At the *very* least... super hot sales of this toy could get some press that could generate investor interest.

There aren't nearly enough of us old Atari fans to make such a sales difference. We could clear the shelves off, but that won't cause WalMart to order more. These items are supposed to sell out. The question is how fast and how hig the demand for more is. If the retail chains had any interest in ordering more, they would have. We're not going to be able to "trick" them into doing so.

 

Some of my ideas included "hidden" features for us, like a cart slot and an expansion slot for homebrewers. Keyboard capability. The slot would be for things like ethernet and whatever else. But the keyboard capability was the biggest thing I wrote about.

You forgot the moss-covered three-handled family gredunza.

 

Suppose that Atari gets their act together and decides to really work those classic properties? That means cell phone games, hand-helds, complilations, subscription services, t-shirts, key chains, all kinds of crap. Atari would need to get a buzz built for this stuff and a plug-and-play system like the Flashback is the way to do it.

 

A Flashback on the shelf or in an advertisement has value even when it doesn't make a sale. An interesting item such as this puts Atari in the mind of consumers. Even those who don't buy a Flashback may be nudged toward buying a DS game or a Major Havoc flight jacket (I wish I could buy one of those).

 

Atari shouldn't be looked at like a video game company, it should be seen as a pop culture collection. Like Disney or Marvel comics.

[atwwong]

This is just great, I've been waiting for the rev Cs to come out and this happens.  I guess I gotta go to the store and get the rev Bs before the hammer falls.

1016677[/snapback]

Good idea. Better safe than sorry. If RevC's do come out, you'll have an extra set of joysticks to play with.

[supercat]

Suppose that Atari gets their act together and decides to really work those classic properties? That means cell phone games, hand-helds, complilations, subscription services, t-shirts, key chains, all kinds of crap. Atari would need to get a buzz built for this stuff and a plug-and-play system like the Flashback is the way to do it.

1016948[/snapback]

 

A fair number of Atari's properties could work pretty well in a cell-phone format. To be sure, many games have spawned so many knockoffs that the value of the real games might be somewhat diminished, but I would still think there'd be some room for profit there.

[andy_bernstein]

For anyone who reads French, these two articles from La Tribune (the French Wall Street Journal) contain a wealth of information regarding the current financial health of Infogrames / Atari.

 

La Tribune-1

 

La Tribune-2

[mos6507]

You have to understand something. There are a lot of different parts of the game business. The shrinkwrapped commercial game software for consoles and PCs is only one facet of the game business. It's the major leagues, to be sure, but it's also the riskiest way to make money with games. There's a reason why movie studios have changed hands so much, and game companies are following suit. All you need is one "Heaven's Gate" and you are toast. Casual gaming is much lower risk, but it's something that has been largely ignored by the major players because it doesn't have the same cachet. Independent game publishers have risen up to fill that void. Like where I work we have two really big sites, gamerival and grab.com that offer online and downloadable games. Some of these games are really fun. None of them are comparable to the immersive experience you get when you buy a big budget title, but some of them are surprisingly polished. There are companies who make money solely on licensing these titles to sites like ours. They are making enough money to raise their production values far beyond the "one guy in his spare time" level. This kind of business model is completely foreign to companies like Atari. Hasbro Interactive before it was never able to "get it" enough to do anything with Games.com. They took some pretty nicely coded Java applet emulators and threw it on a pretty damn klunky website.

 

I really think that any current or future instance of Atari should be thinking outside of the box this way. They should be looking into the area of de-emphasizing big-budget productions and focusing on making new titles with a classic feel and bringing together a community on the web. Imagine if they built a community like AtariAge and then hosted games directly on it. It all feeds back onto itself in a positve way.

 

I just don't think the accountant types know how to conceive of this kind of business model. They just know the existing business which means they will never differentiate themselves from the pack.

[nathanallan]

I remember Cybiko, and they tried to make a community like that but they didn't stick to it. Plus, the Cybiko had a few more flaws than the FB2 ever had. Proprietary batteries, wierd errors, generally a bad product. Then they pulled the plug on the project. To this day I don't know why. I loved mine till it broke and they wouldn't return my emails or phone calls. I had all kinds of add-ons in mind, more than just an mp3 player.

 

A community idea is a great one, and I would actively participate daily! IF they made the FB3 with a cart slot, what then? How about kits to make your own carts? That's an idea I read here somewhere. Anyway, I think it would work as long as they stuck to it.

 

Cybiko had great services (for a time) but a crappy product that needed to be developed more. Atari has the FB2, a terrific product but with little support from the company. A community would be great!

[Artlover]

I remember Cybiko, and they tried to make a community like that but they didn't stick to it. Plus, the Cybiko had a few more flaws than the FB2 ever had. Proprietary batteries, wierd errors, generally a bad product. Then they pulled the plug on the project. To this day I don't know why.

1017699[/snapback]

Didn't you just answer your own question?

[DracIsBack]

Really guys, it boils down to this:

 

If the Flashback units are profitable and the opportunity cost of making them isn't taking away resources from other (potentially more profitable) ventures, chances are great you'll see another one.

 

My gut is that Atari is likely doing some heavy-duty business unit reviews to assess their lineup moving forward and killing, re-tooling the riskier projects. On one hand, the flashback is more expensive to manufacture and ship than a game. On the other, the development costs are likely SIGNIFICANTLY lower.