Atari 2600 console (Credit: Atari)One of the most famous names in video games has run out of lives.
Iconic video game company Atari has filed for Chapter 11 bankruptcy protection and plans to auction off all of its assets, including its famous logo.
Atari, which turned 40 last year, says it plans to continue operations during the bankruptcy and notes the impetus behind the filing was to help it separate from its French parent company, Infogrames Entertainment. It still hopes to expand its footprint in the mobile and downloadable games markets.
It's no secret that Atari hasn't been performing well in the past few years, but the company's U.S. arm has done better than other parts. AP reports licensing revenue was up 70 percent last year, in fact.
The company's credit agreement -- which has been providing it enough cash to stay in business -- expired at the end of December, though. CEO Jim Wilson says the filing was the "best decision to protect the company and its shareholders."
No buyer has been announced yet, but Atari said it expects to have a restructuring plan in place within the next six months. The question is: What will that plan revolve around?
Part of the bankruptcy filing calls for the company to sell its assets, including legendary games like Pong, Asteroids, Centipede, and Missile Command. Certainly, a buyer of those assets could be a white knight for the U.S. branch, but if things go awry, Atari could be split into pieces.
But before you shed a tear for the icon, keep in mind that the company has bounced back from the precipice of death several times before.
Atari first faced troubles back in its heyday, when a perfect storm (including some terrible, terrible games) conspired to create the video game crash of 1983. The company was split up and passed through several hands over the ensuing decades. In 2006, it appeared the studio was doomed (its own chief financial officer publicly said it was shooting itself in the foot), yet somehow, Atari pulled through.
The company will need more than a few quarters to stay in business this time, however.