Infogrames Entertainment, SA

Infogrames Entertainment SA (IESA) was an international French holding company headquartered in Villeurbanne, Lyon, France. It was the owner of Atari, Inc., headquartered in New York City, U.S and Atari Europe. It was founded in 1983 by Bruno Bonnell and Christophe Sapet using the proceeds from an introductory computer book. Through its subsidiaries, Infogrames produced, published and distributed interactive games for all major video game consoles and computer game platforms.

Early history
The founders wanted to christen the company Zboub Système, but were dissuaded by their legal counsel. According to Bonnell in a TV interview, they then used a mix-and-match computer program to suggest other names, one of which was "Infogramme": a portmanteau of the French words "informatique" (information technology) and "programme" (a computer program). The final choice, "Infogrames", was a slightly modified version of that suggestion, and is in English.

The company logo is an armadillo (tatou in French), chosen when the company was moved to Villeurbanne. Bonnell commented: "This dinosaur [sic] is our symbol. The armadillo has always survived changes to its environment, from the melting of glaciers to the worst of heat waves."

In the late 1980s Infogrames was noted for its French computer games that often featured original game ideas and occasionally humorous content. They had acquired several licences for popular Franco-Belgian comics, such as Tintin, Asterix and Les Tuniques Bleues.

In 1992, they released Alone in the Dark, a 3D horror adventure game to international attention. They also released, "Fantasia" for the Sega Genesis, with the player controlling Mickey Mouse on a quest to locate lost musical notes.

1996-2002 - growth through Acquisition
In 1996, Bruno Bonnell's Infogrames embarked on an acquisition campaign that would last seven years and cost more than $500 million; the objective was to become the world's leading interactive entertainment publisher. While the company's debt increased from $55 million in 1999 to $493 million in 2002, the company's revenue also increased from $246 million to $650 million during the same period.

In 1996 IESA bought Ocean Software for about $100 million, renaming the company as Infogrames UK. In 1997 Philips Media BV was purchased.

In 1998 IESA acquired a majority share of 62.5% in the game distributor OziSoft, which became Infogrames Australia, and in 2002 IESA bought the remaining shares of Infogrames Australia from Sega and other share holders for $3.7 million. In this same year the distributors ABS Multimedia, Arcadia and the Swiss Gamecity GmbH were acquired.

In 1999 IESA bought Gremlin Interactive for $40 million, renaming it to Infogrames Sheffield House but it was closed in 2003. In the same year IESA also bought Accolade for $60 million and Beam Software, later renamed to Infogrames Melbourne House Pty Ltd.

Acquisition of GT Interactive
Then in December 1999, IESA made one of the most expensive acquisitions in the company's history. Infogrames bought 70% of GT Interactive for $135 million, and assumed the new subsidiary's $75 million bank debt. By June 2000 Infogrames had invested another $30 million in GT Interactive. IESA justified the purchase by stating that GT Interactive provided Infogrames with a "distribution network for all of its products in the United States, as well as a catalog of products that includes Driver, Oddworld, Unreal Tournament and Deer Hunter".

Included in the GT Interactive purchase were the game development studios Humongous Entertainment, Legend Entertainment and Reflections Interactive.

GT Interactive became Infogrames, Inc.

In 2000 the developer Paradigm Entertainment was bought for $19.5 million and in-flight games developer Den-o-Tech Int. (DTI), later renamed to Infogrames DTI, was also acquired for $5.6 million.

Acquisition of Hasbro Interactive
In January 2001, IESA purchased Hasbro Interactive and the handheld game console Game.com from Hasbro for $100 million; with $95 million as 4.5 million common shares of Infogrames and $5 million in cash.

With the acquisition of Hasbro Interactive, which was renamed as Infogrames Interactive, Inc, IESA became the owner of:


 * The MicroProse brand and titles, including Civilization, Falcon, and RollerCoaster Tycoon;
 * The legendary Atari name and properties, such as Centipede, Missile Command, and Pong.

MicroProse UK studio was eventually closed on September 20, 2002.

Also under the terms of the sale agreement, Infogrames gained the exclusive rights to develop and publish games based on Hasbro properties, which included Dungeons and Dragons, Mr. Potato Head, My Little Pony and others, for a period of 15 years plus an option for an additional 5 years based on performance.

Eden Games and Shiny Entertainment
In 2002 IESA acquired the remaining 80% of game development studio Eden Games for $4.1 million and Shiny Entertainment for $47 million. With Eden Games, IESA would have right to publish Eden Games titles, such as V-Rally 3 and later Test Drive Unlimited, and with the Shiny Entertainment acquisition, IESA obtained the rights to develop and publish Enter the Matrix which was the first game based on The Matrix films and sold more than 5 million copies.

Atari Group
In October 2001, IESA relaunched the Atari brand when Atari Interactive, Inc., at that time a wholly owned subsidiary of Infogrames Interactive, Inc., released MXrider. On May 7, 2003, IESA officially reorganized its Infogrames Inc. US subsidiary as a separate Nasdaq listed company known as Atari Inc., named its European operations as Atari Europe, renamed Infogrames Interactive, Inc. to Atari Interactive, Inc., (a wholly-owned subsidiary of IESA), rebranded Infogrames Australia Pty Ltd as Atari Australia Pty Ltd, renamed  Infogrames Melbourne House Pty Ltd to Atari Melbourne House Pty Ltd,  Infogrames UK became Atari UK, while IESA became a holding company.

Atari Inc. is a public company that, as of 2007, has as majority stockholder the company California U.S. Holdings, Inc., a wholly-owned subsidiary of IESA. Atari Inc. licences the Atari trademark from Atari Interactive, Inc., a license which will expire in 2013. Atari Inc. has the rights to publish and sublicense in North America certain intellectual properties either owned or licensed by IESA or its subsidiaries, including Atari Interactive, Inc.

Atari's Australian subsidiary also distributes games for Konami of Europe, Codemasters UK, Eidos Interactive and SCi. Konami has an Australian headquarters but this is for Konami's Gaming Machines.

Financial difficulties
In the fiscal year of 2002 IESA had a net loss of $67 million on revenues of $650 million, and in 2003 the net losses increased to $89 million. In 2006 IESA reported a net loss of $201 million on revenues of $525 million, and debts of around $290 million. From 1999 to 2006 IESA accumulated losses totaling €500 million.

In 2004 Infogrames sold the rights to the Civilization franchise to Take-Two Interactive for $22.3 million and closed down Legend Entertainment studios. Also that year Infogrames lost the right to publish games of the phenomenally popular Unreal franchise when the game's developer Epic games signed with Midway Games. In June 2005, Infogrames sold back to Hasbro the digital rights to most Hasbro properties including The Transformers, My Little Pony and Connect Four, but not Dungeons and Dragons, for $65 million.

On April 2007 Infogrames' founding chairman Bruno Bonnell left the company after 24 years; on the day of the announcement of his departure IESA's shares jumped 24%. After his resignation, Infogrames through the remainder of 2006 sold intellectual properties and some studios in order to raise cash and stave off the threat of bankruptcy.

In May 2006 IESA sold the rights to the games Stuntman to THQ and Timeshift to Saber Interactive. The sales generated $13 million in revenue. THQ also bought developer Paradigm Entertainment from IESA. In July 2006 IESA sold the game developer Reflections Interactive and the rights to the Driver franchise for $21.6 million to Ubisoft. In October, Shiny Entertainment was acquired by Foundation 9 Entertainment for $1.6 million. In November of the same year Atari Melbourne House was sold to Krome Studios and renamed to Krome Studios Melbourne.

In 2007 Infogrames fired the majority of Atari's directors and laid off 20% of its workforce. For the 2006-2007 fiscal year Atari posted a net loss of $70 million.

Atari Inc. buyout
On March 6, 2008, Infogrames made an offer to Atari Inc. to buy out all remaining public shares for a value of US$1.68 per share or US$11 million total. The offer would make Infogrames sole owner of Atari Inc., making it a privately held company.

On April 30, 2008, Atari Inc. announced its intentions to accept Infogrames' buyout offer and merge with Infogrames.

On October 9, 2008, Infogrames completed its takeover of Atari Inc. With that acquisition the Atari brand was re-united under Infogrames. Infogrames said that it planned to reduce administrative costs and to focus on online gaming.

Namco Bandai buyout of Atari Europe and Distribution Partners
In December 2008, Infogrames bought Cryptic Studios for $26.7 million in cash plus performance bonuses. Cryptic Studios is a massively multiplayer online game developer and its acquisition is in line with the company's new business strategy which focuses on online games.

Namco Bandai and Infogrames formed a joint venture called Distribution Partners in September 2008. Distribution Partners was defined by Infogrames as a regrouping of "Infogrames’ distribution operations in Europe, Asia, Africa and South America." This new entity consisted mainly of Infograme's distribution network in the PAL region. Distribution Partners was 34% owned by Namco Bandai and 66% owned by Atari.

In May 2009 Namco Bandai acquired Atari Europe from Infogrames. Its sale and marketing personnel were transferred to Distribution Partners. In March 2009, Infogrames, announced that it was getting out of the distribution business in the PAL region with its decision to sell its 66% stake at Distribution Partners. According to an Infogrames press-release, this sale allowed "Atari to focus its financial resources and creative energy exclusively on developing and publishing online-enabled games".

In July, the deal valued at €37 million was completed; Distribution Partners was renamed to Namco Bandai Partners. At that time the company had operations in 50 countries and 17 dedicated offices.

Despite restructuring, Infogrames continued to struggle to become profitable. For the 2008 fiscal year the company posted €51.1 million ($72.17 million) in net losses and for the 2009 fiscal year, which ended in March, Infogrames posted losses of €226.1 million ($319.33 million).

Transition from Infogrames Entertainment
During their fiscal year meeting (May 2009), IESA announced that it would be changing its corporate name to an Atari branded name, in line with the use of the name for its subsidiaries. In reference to this, Atari, Inc's CEO Jim Wilson said: "We've gotten rid of the Infogrames and Atari duality, the confusion around that. We are one simplified company, under one management team, under one brand."

Infogrames' May 29 earnings report stated:
 * "The Board agreed to change Infogrames Entertainment’s name to Atari. This decision will enable us to make the best use of the Atari brand, capitalizing on worldwide strong name recognition and affinity, which are keys drivers to implement the Company’s online, product and licensing strategies."

A later July 24 earnings press released further clarified a name change from the May 29th report, with a change from Infogrames, S.A. to Atari, S.A.. It additionally stated the continued use of Atari Group for its Atari branded and related subsidiaries.

Current

 * Atari Group, name acquired from Hasbro Interactive in January 2001.
 * Atari Benelux
 * Atari Brazil Ltd.
 * Atari Corp. (UK) Ltd.
 * Atari Deutschland
 * Atari France
 * Atari Hellas EURL
 * Atari Iberica Distribucion
 * Atari ITALIA
 * Atari Inc. in New York, New York, U.S founded as GT Interactive in 1993, acquired in December 2001.
 * Atari Japan
 * Atari Korea Ltd.
 * Atari Nordic
 * Atari UK Ltd.
 * Cryptic Studios in Los Gatos, California, U.S, founded in 2000, acquired on December 9, 2008.
 * Eden Games S.A.S., headquartered in France, founded as Eden Studios in 1996, acquired in May 2002.
 * Humongous

Defunct

 * Accolade (developer) in San Jose, California, U.S founded in 1984, acquired in 1999, folded into Los Angeles Studio.
 * Atari Interactive Chipping Sodbury, founded as Microprose Software in 1982, closed September 2002.
 * Atari Interactive Hunt Valley Studio, founded as Microprose Software in 1982, closed Nov 4, 2003.
 * Atari Interactive Beverly in Beverly, Massachusetts, U.S closed February 10, 2005.
 * Atari Interactive Santa Monica, U.S closed February 10, 2005.
 * Atari Melbourne House Pty Ltd., founded in 1980 as Beam Software, acquired in 1999, sold to Krome Studios.
 * Atari UK in Manchester, England, founded in 1984 as Ocean Software, acquired in 1998, renamed in 2004, closed in 2005.
 * Gremlin Interactive in Sheffield, UK, founded in 1984 as Gremlin Graphics Software Ltd, acquired in 1999, closed in 2003.
 * Humongous Entertainment in Bothell, Washington, U.S founded in 1992, acquired by GT Interactive in July 1996, closed in 2005.
 * Infogrames Interactive Alameda Studio, founded as Microprose Software in 1982, closed December 1999.
 * Infogrames Interactive Chapel Hill, founded as Microprose Software in 1982, closed December 1999.
 * Legend Entertainment in Virginia, U.S founded in 1989, acquired in December 1999, closed January 16, 2004.
 * WizardWorks Software in Minneapolis, MN, U.S acquired by GT Interactive in 1996, folded into the Beverly office in 2004.

Sold

 * Atari Australia Pty Ltd in Sydney, Australia, founded as Ozisoft Pty Ltd in 1982, completely acquired on April 15, 2002, sold to Namco Bandai Holdings on July 7, 2009.
 * MacSoft in Plymouth, Minnesota, U.S founded in 1993, sold to Destineer on January 30, 2003.
 * Paradigm Entertainment in Carrollton, TX, U.S founded in May 1998, acquired by Atari Interactive on June 29, 2000, sold May 2006 to THQ.
 * Reflections Interactive in Newcastle upon Tyne, United Kingdom, founded in 1984, sold to Ubisoft in August 2006.
 * Shiny Entertainment in Laguna Beach, California, U.S founded in 1993, acquired in 2002, sold on October 2006 to Foundation 9 Entertainment.
 * Atari Europe, founded in 2003, sold to Namco Bandai in 2009, merged into Distribution Partners.