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Infogrames Reports Big Loss On Atari Writeoffs

Following news from publisher Atari concerning its disappointing financial results for the fiscal...
Following news from publisher Atari concerning its disappointing financial results for the fiscal 2006 fourth quarter and year ended March 31, 2006, the company's parent, French publisher Infogrames has revealed increased losses due to the troubles faced by its U.S. subsidiary. Infogrames noted that U.S. operations had a negative impact of €200.8 million ($253.6 million) to the company's operating income, while both Europe and Asia generated an operating profit of €5 million ($6.3 million) and €1.4 million ($1.7 million), respectively. Infogrames also noted that operating loss increased to €154.1 million ($194.6 million), up from the previous year's loss of €33.9 million ($42.8 million). The company indicated that its net loss of the year increased from €33.6 million ($42.4 million) in the previous year to €149.8 million ($188.4 million). The loss followed a €125.4 million ($158.4 million) write-down of goodwill associated with a "decline in the market over the past several months and the poor performance by certain key products in the last quarter of the year and losses in the United States," according to the statement released by the company. The company noted that despite the significant losses reported, it still plans to go forward with several next-generation titles during fiscal 2006-2007 in Europe, including Test Drive Unlimited, Dungeons & Dragons, Alone in the Dark, Earthworm Jim, Dragon Ball Z, Asterix & Obelix, Hot Pxl and the Christmas release of Arthur and the Minimoys, inspired by the eponymous Luc Besson movie and produced by Europacorp. Infogrames noted that it continues to focus on restoring its investment capacity and cutting €173.2 million ($218.8 million) debt (as of the end of March) as part of its cost-cutting plan previously announced in February in an effort to regain financial stability. It also indicated that efforts were initiated during the year to restructure the US operations. Since that time, the company has reduced its headcount by 25 percent, as well as what it called "the divestiture of certain non-core assets", which included the sale of the TimeShift and Stuntman game franchises, as well as the Games.com casual game site, and Texas-based studio Paradigm Entertainment.

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