THQ Splits, Atari Files for Bankruptcy

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Atari & THQ logos

(Today’s post isn’t directly about technology, but these bankruptcies hit close to home for many of us who enjoyed these company’s products so I figured I’d do something about it.)

THQ has been split up into various pieces and Atari has filed for bankruptcy. Well, they both filed for (Chapter 11) bankruptcy but Atari isn’t going completely away like THQ. THQ’s split finalized on Jan. 23 (bankruptcy date Dec. 19) and Atari broke their bankruptcy news on Jan. 21. No more Humble Indie Bundles, no more simplistic joystick and button. I’ve heard various stories on the failings of both, but I have not been able to pinpoint a singular answer. Of course, bankruptcy cases are never black and white. Here are their stories from my understanding. This post is open to all comments, speculation and feels.

In the beginning, THQ’s assets and the WWE franchise were supposed to go to Clearlake Capital Group for $60 million. On top of that, THQ owes WWE $45 million. On top of that, shareholders are pissed because they’re getting none of their investments returned. Check out CageSideSeats‘ website for more info on how angry everyone is. About six days ago, an article on Forbes showed up. No mention of Clearlake Capital having bought the company and all its assets, instead it details to which companies games and studios of THQ went. Koch Media acquired Saints Row, Volition Inc., and Metro: Last Light for $22.2 million. Ubisoft took Montreal Studio and the South Park RPG Stick of Truth for $5.8 million. Sega bought Relic Entertainment and their game Company of Heroes. Crytek, the guys that do Far Cry bought the Homefront games. Vigil Studio (Darksiders series) remains without a buyer but Platinum Games has interest in Darksiders, just not the studio. Nothing has been said about whether WWE is being bought but Take Two Interactive has interest in the franchise. Also, UFC will be taken by EA. The company also supported the failure tablet uDraw with some games and has severely lost money in that area. The Forbes article attempts to bring some light into this situation by mentioning the amount of microstudios and indie games that will possibly come out of this fiasco, but that might be a long time coming. THQ kept itself afloat for over 20 years … Here’s a touching tweet:

Atari has basically always had it rough. During the video game crash in the early 1980s, Atari suffered tremendous losses and people were even unsure whether video game consoles would succeed as a product (kind of sounds like those who speculated about the PC). The company also hit hard times after the production and subsequent failure-of-the-world game E.T. which they buried in the New Mexico desert. (If you have a moment, please watch the most hilarious video of a guy who attempts to play the game.) Atari was also being beaten up by Nintendo’s and Sega’s very successful products. “The first Atari, the original one (Atari Inc.) was split up in 1984, with Jack Tramiel taking the Consumer Division. He folded that into his own company (TTL) and renamed TTL into Atari Corp. Likewise, the Atari Inc. under Infogrames has zero to do with any chain of Atari ownership. That Atari Inc. was originally GT Interactive, which was taken over by Infogrames SA and merged with several other companies, at which point Infogrames renamed it to Infogrames NA, Inc. When Infogrames then bought Hasbro Interactive (which included the Atari IP), they renamed named that to Atari Interactive (where the Atari IP resides to this day) and renamed Infogrames NA, Inc. into Atari Inc. In 2009, Infogrames SA renamed itself to Atari SA,” explains Marty Goldberg a professional industry historian who works as both a writer and programmer in the industry as well. He recently co-authored the book, “Atari Inc. – Business is Fun.” Also check out CNN and Forbes‘ articles on Atari. Goldberg provides more information about the CEO of Atari in the comments. “Jim Wilson (current CEO) had a press release released under Atari Inc. as if it was a separate entity looking to get out from under it’s “French” owner when he is running both companies,” he says. This is apparently an illusion. Why Wilson would want to muck up the real situation of the bankruptcy is being looked into.

*Sigh* The gaming world will never stop and quite recently it has been moving rather fast. Where one product says the computer has been used to heavily and develops a console product, another says consoles are being used too much and develops a computer product. Even though THQ got way in over its head and had to declare bankruptcy, other companies don’t let their games or studios fail. And Atari just keeps on trucking.

Alright audience. Did I miss anything, mess anything up? Leave me your comments, questions and corrections!

Big thanks to corrections by Marty Goldberg.

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4 responses to “THQ Splits, Atari Files for Bankruptcy

  1. You’re mistaken on a number of issues with “Atari.” First, these are all different companies using the brand name, there is no one continuous company that lasted until now, there has been no “re-ownership”. At the close of Atari Corporation, anything related to Atari was purely in liquid asset form (a brand name and IP). Second, nobody using the Atari brand name has every declared bankruptcy before, including during the ’83 crash.

    The first Atari, the original one (Atari Inc.) was split up in 1984, with Jack Tramiel taking the Consumer Division. He folded that into his own company (TTL) and renamed TTL into Atari Corp. Likewise, the Atari Inc. under Infogrames has zero to do with any chain of Atari ownership. That Atari Inc. was originally GT Interactive, which was taken over by Infogrames SA and merged with several other companies, at which point Infogrames renamed it to Infogrames NA, Inc. When Infogrames then bought Hasbro Interactive (which included the Atari IP), they renamed named that to Atari Interactive (where the Atari IP resides to this day) and renamed Infogrames NA, Inc. into Atari Inc. In 2009, Infogrames SA renamed itself to Atari SA.

    As for the France/US thing, that’s an illusion. Jim Wilson, who is both President of Atari Inc. and CEO of Atari SA, moved the operating headquarters to Los Angeles several years back. Jim is filing for separation from himself. Additionally, both companies have filed for bankruptcy now, not just Atari Inc.

    • Thanks for your reply, Marty. This is great information that I am clearly totally confused on. I’m curious as to where you gathered your information on this topic? And can you explain what you mean by the France/US issues being an “illusion”? CNN says, “The New York-based U.S. arm wants to be free of its French baggage. Atari U.S. said it will “conduct its normal business operations” during the bankruptcy proceedings” and that they are “looking to ‘secure independent capital for future growth, primarily in the areas of digital and mobile games.’” I’m no expert – clearly – but I’m curious how you would respond to information like that and where you’re getting your own info? Is it just educated opinion? Thanks again for weighing in!

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