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Atari says it may need additional funding to keep up with retro VCS console flop and blockchain struggles

Atari is in trouble and has signaled that it may need additional money to continue.

Reports its half-year results as of September 30, 2022, the Paris-based company admitted that any delay in the development of its four businesses (gaming, hardware, licensing and blockchain), or the underperformance of its initiatives could cause it to win less money than expected, and in turn cause “a lack of liquidity and additional financing needs”.

There is an “uncertain macro-environment” for video games and the blockchain, the latter on which Atari has invested heavily, and the company therefore believes that implementing its new strategy “may require additional funding resources. “.

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Options outlined include new loans with its major shareholder Irata, a company controlled by current Atari Chairman and CEO Wade Rosen, and/or raising new funding elsewhere, which may include a “public offering. . to meet capital needs and refinance”. the Company’s debt.

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

These initiatives are struggling to succeed. For the first half of the financial year ended in September, Atari’s turnover amounted to 4.3 million euros, down 27% compared to the 6 million euros generated at 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 heavy delays before finally launching last year. In isolation, revenues from the hardware business fell 92%, from 2.3 million euros to just 200,000 euros.

Gaming revenue, however, rose 10% as a result of roller coaster designer and new games in the Recharged series. Licensing revenue decreased by 18% and blockchain revenue (NFT sales) increased from the low base of €400,000 to €700,000.

In total, Atari recorded a net loss of 5.4 million euros, compared to a loss of 3.5 million euros in the same period last year.

Atari is welding, and in a statement released to Tom’s gear insisted that he “remains committed to the VCS platform”.

In April, Atari killed its ATRI token and Atari Chain projects. At the time, Atari said it would look into creating a new token as part of its blockchain roadmap, but even that doesn’t seem to be happening – or if it does, it doesn’t. won’t happen anytime soon.

“This project is still at an early stage in its development as Atari fully intends to examine the different structuring options available and the regulatory framework, as well as the current uncertainty around the blockchain market environment, in order to make this project relevant to its community of fans and partners,” Atari said.

Meanwhile, Atari sits on 972 “plots” in the Sandbox metaverse. This fictitious real estate does nothing for the company and it won’t for at least the next 12 months.

Atari said in its gloomy outlook that it was 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 continue to focus on executing its roadmap and transforming its operations across all four business lines” , the company insisted.

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