Atari Announces Layoffs, Looks to Lighten Load

Following Atari's troubled financial situation announced last week, the company is looking to sell its development studios, presumably to focus on publishing. These days, Atari itself is essentially the North American label for French corporation Infogrames. The layoffs will apply to the North American operation. CNN/Money's Chris Morris reports on what Wedbush Morgan analyst Michael Pachter is saying about the decision, and the gist of it is that it's not a good one. If anything, Pachter says, the company should be keeping its North American development operations and trimming the marketing and publishing teams in France.
"I think [selling studios] is not the right move," said Michael Pachter, an analyst with Wedbush Morgan Securities. "The first thing the company should do is shut down everything in Europe. [Atari CEO] Bruno (Bonnell) is out to lunch. ... The guys in the U.S. make games. The guys in Europe just sell them."
Bonnell did not indicate whether Atari would be willing to sell the rights to some of its more popular games. The "Driver" franchise, for instance, still has a loyal following (despite a truly awful last installment of the game). It might be a moot question, though, as Atari would be unlikely to find any serious bidders.
"Nobody comes in to bid on that," said Pachter. "They wait for the body to stop twitching, then swoop down and pick the meat off the carcass."

If Atari does in fact hold on to franchises such as Driver, one wonders how easily they would be able to sell studios such as Reflections, which is responsible for the Driver series. Selling those franchises, though, diminishes what little leverage Atari has left at this point. While the Atari name still carries huge significance in gaming history and is well known among gamers and non-gamers alike, it simply does not have a current day reputation among people who buy games.

CEO Bruno Bonnell points out that Atari still has games in development at its various studios, and will not be selling those studios until current projects have seen completion. What exactly the company plans to do after it does sell those studios is anybody's guess at this point. It hasn't had the best track record managing studios; Shiny, the studio most famous for well-loved games such as Earthworm Jim and MDK, hasn't done so well with its The Matrix licensed games under Atari. The first two entries in Reflections' Driver series were well-received, but Driver 3 (aka Driv3r), developed after Atari acquired Reflections parent GT Interactive, received a legendary critical drubbing.