Atari says it may need additional funds to continue tracking the VCS retro console’s flop and blockchain battles

Atari is in trouble and has signaled that additional money may be needed to continue.

reporting In its half-year results ended September 30, 2022, the Paris-based company admitted that delays in the development of its four activities (games, hardware, licensing and blockchain) or underperformance of its initiatives could result in it making less money than expected , and these in turn spark “a liquidity gap and additional funding needs.”

There’s an “uncertain macro environment” for video games and blockchain that Atari has embraced heavily, and so the company believes actual execution of its new strategy “may require additional funding resources.”

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Options outlined include new borrowings with its major shareholder Irata, a company controlled by current Atari chairman and chief executive officer Wade Rosen, and/or raising new financing from elsewhere that will constitute a “public offering…to cover the… Capital requirements and refinancing” may include the company’s debt”.

This all sounds like tough times for Atari, which of course is a different company today than it was in its glory days. Today’s Atari is involved in Web3, NFTs and the blockchain, in addition to licensing and hardware production.

These initiatives struggle to succeed. For the first half of the fiscal year ended September, Atari’s revenue was €4.3 million, down 27 percent from €6 million for the same period last year.

Atari said this was mainly due to the failure of its hardware business and the controversial VCS console, which suffered severe delays before its final launch last year. The income from the hardware business alone collapsed by 92 percent from 2.3 million euros to just 200,000 euros.

However, game revenue increased by 10 percent compared to RollerCoaster Tycoon and new games in the Recharged series. Licensing revenue fell 18 percent and blockchain revenue (NFT sales) surged from the low base of $400,000 to $700,000.

All in all, Atari made a net loss of 5.4 million euros, compared to the 3.5 million euros loss in the same period last year.

Atari is going ahead, and in a statement issued to Tom’s hardware insisted it “remains committed to the VCS platform”.

In April, Atari ended its ATRI token and Atari Chain projects. At the time, Atari said it was exploring creating a new token as a component in its blockchain roadmap, but even that sounds like it won’t happen — or if it is, it won’t happen any time soon .

“This project is still in an early stage of development as Atari intends to thoroughly review the various structuring options and regulatory frameworks available, as well as the current uncertainty surrounding the blockchain market, in order to make this project relevant to its fanbase and partners,” said Atari.

Atari now sits on 972 “parcels” in the sandbox metaverse. This bogus property is of no use to the company and will not be for at least the next 12 months.

Atari said in its gloomy outlook that it’s too early to expect its “turnaround strategy” to have a significant impact on revenue and profitability.

“In a challenging macro environment for video games and blockchain initiatives, Atari intends to remain focused on executing its roadmap and transforming its operations across all four business segments,” the company said.

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Fry Electronics Team

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