Video Game Legend Atari files for Chapter 11 Protection
Atari, the company responsible for the widely popular video game “Pong” released in 1972, has officially filed for Chapter 11 Protection. Atari management has stated that they expect to “sell or restructure all [its] assets in the next 120 days.” The company has changed leadership several times since its inception, which, no doubt, meant multiple shifts in its business model. What started as an arcade and console focused gaming company has just recently jumped on the digital platform bandwagon. In December 2012, Atari launched a successful “Atari’s Greatest Hits” application in the AppStore and the Android Marketplace. This bold move suggests that the firm is ready to join its competitors in the digital revolution to attract a financer for the $5.25 million needed to continue operations.
Could this late transition spell disaster for the legendary Atari? The Atari story is ominously similar to the once great photographic equipment company—Kodak.
In January 2012, Kodak’s average closing price on the NYSE had been below $1.00 for 30 consecutive days after the NYSE had already warned the firm about raising stock prices lest it be removed. From being a strong member of the photography industry at $90 a stock in 1997, Kodak failed to innovate and fell from grace, closing at 76 cents on January 3rd 2012. Could Atari share the same fate as Kodak? Or has Atari saved itself by the skin of its teeth? We will find out over the next 120 days!