Atari says it may need additional funding to continue following the legacy VCS console failure and blockchain struggles

Atari is in trouble, and has indicated that it may need additional cash to continue.

Reporting results for the half-year through September 30, 2022, the Paris-based company acknowledged that any delays in the development of its four businesses (gaming, hardware, licensing, and blockchain), or poor performance in its initiatives could result in less money than expected, This, in turn, leads to a “liquidity shortage and additional financing requirements”.

There is an “uncertain macro environment” for video games and blockchain, and Atari has been heavily involved in the latter, and thus the company believes that implementing its new strategy “may require additional funding resources.”

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Options described include new loans with its major shareholder, Irata, a company controlled by current Atari President and CEO Wade Rosen, and/or raising new financing from 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 is of course a different company now than it was in its glory days. Atari is now involved in the likes of Web3, NFTs and blockchain as well as licensing and hardware production.

These initiatives are struggling to succeed. In the first half of the fiscal year ending in September, Atari’s revenues were 4.3 million euros, down 27 percent from the 6 million euros it generated in the same period last year.

Atari said this was mostly due to the failure of its hardware business and the controversial VCS console, which suffered significant delays before its launch last year. In isolation, revenue from the hardware business fell 92 percent from 2.3 million euros to just 200,000 euros.

However, gaming revenue was up 10 percent on the back of RollerCoaster Tycoon and new games in the Recharged series. License revenue decreased by 18 percent, and blockchain revenue (NFT sales) increased from the low base of €400,000 to €700,000.

All told, Atari reported a net loss of €5.4 million, up from the €3.5 million loss it incurred during the same period last year.

Atari is soldering, and in a statement to Tom’s Hardware insisted it “remains committed to the VCS platform.”

In April, Atari killed off its ATRI token projects and the Atari series. At the time, Atari said it would investigate new token generation as a component of its blockchain roadmap, but even that doesn’t seem to be happening — or if it is, it won’t happen anytime soon.

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

Atari, meanwhile, sits on 972 “plots” in the Sandbox metaverse. These fictional properties do nothing for the company and will do nothing for at least the next twelve months.

In its grim outlook, Atari said 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 focusing on executing its roadmap and transforming its operations across all four business lines,” the company insisted.

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