Several weeks ago, we reported that Atari U.S. was filing Chapter 11 bankruptcy and was looking for buyers, in order to distance itself from the struggling French parent company. Well, former Atari Interactive CEO, Frédéric Chesnais has placed a bid in order to rescue his old stomping grounds from an unfortunate demise or dismemberment.
He's offered to take a 25.23% stake in Atari U.S. and said he would pay the current lead investor and shareholder, BlueBay, for over 7 million Atari shares, as well as pay for the required convertible bonds that would let him have another 5.5 million. Chesnais' investment group, Ker Ventures, has also granted a very large short term cash loan to the parent company, Atari SA, even before the transaction has completed, and has chose not to pile on the interested until September.
Atari US has also had investments from Alden Fund, which is a company whose expertise is in fixing slumping companies. Alden will actually pick up the loan that Atari owes to BlueBay, plus, the company is financing $5 million to Atari's subsidiaries, Atari Inc, Atari Interactive, California US Holding and Humongous Inc. $2 million has already been sent over, with another $3 million becoming available upon the court's approval.
A company spokesperson said on the news,
It's quite good news for Atari that new shareholders can be found. But the situation remains very difficult for the company because of the Chapter 11 bankruptcy protection filing in the U.S. The judge in the U.S. will play a very important role in the future of the company.
If a former Atari CEO wants to save the company, along with some other investors, I can only see good things coming out of this. If everything goes through as it should, this transaction should keep the integrity of Atari intact and the company won't be chopped to pieces and sold to several competitors.
posts a small profit, they are still struggling in the sea of mobile and social game developers, and that sea keeps getting larger. GameStop has been talking about moving into the digital realm for a while now, and started doing that exact thing when they bought Kongregate in 2011. Now, the used-game giant is putting up $10 million for mobile game developers.
How will it work? GameStop will be fronting the money, their consulting services and marketing support to any developer who chooses to come up with a free-to-play mobile game for their Kongregate service. Then, through GameStop's channels, it will promote said game, which is huge, considering half a billion people visit GameStop brick-and-mortar stores each year. This is also a very intriguing move, as the company is pretty much buying the efforts of smaller developer studios, as long as they think the game will be successful. For mobile games, the hardest part is gaining exposure and traction, so with a push from GameStop it's possible that the games will be put on an accelerated path to popularity.
In keeping with the "battling Zynga" mentality, GameStop has also brought on former Zynga exec, Pany Haritatos, to lead Kongregate's mobile games division. With eight years of mobile gaming experience, Haritatos seems like a perfect fit. On this news and the already-existent success of Kongregate, Haritatos said,
Developers are increasingly finding it harder to get their games discovered through the different app stores. I personally faced these challenges in 2009 while managing my own game studio. Utilizing the Kongregate platform made my games successful, which ultimately led to my studio being acquired by Zynga... The fact is that there are hundreds of developers trying to get into mobile but they cannot compete with those that are in mobile now. They need to get their games in the hands of core gamers, but there is no easy way for them to do that.
With 15 million unique visitors a month who play games on the platform for over 28 million hours, it's possible that this move could be what launches GameStop into the same competitive realm as its opponents. It'll be interesting to see how they go about it, but investing $10 million is serious business, so it looks like they're going all-out in hopes to pick up a bunch of great games.
It has been several quarters and many bad decisions since the last time Zynga, the spammers of Facebook, posted a profit. This week, the company bucked that trend, posting 1 cent per share. Compared to the expected 3 cent per share LOSS, that is an impressive performance.
So, how did they pull it off? It would appear to be entirely the work of David Ko, Chief Operating Officer for Zynga. He stepped up and made the hard decisions, like cutting properties that have a fairly large fan base, but were still costing more than they were making. For example,
CityVille 2 has seen its end, along with The Friend Game and Party Place.
While the second and third titles haven't been entirely successful,
CityVille 2 has been popular. Ko described the process as "putting up guard rails" to allow managers to end a game that is proving to be popular but not profitable before they become a financial sinkhole. The plan moving forward is to focus on new franchises, creating mobile properties and making money.
While making money sure seems like an obvious goal for a company, it hasn't been that obvious to Zynga as of late. The goal is going to be more difficult to achieve with all of the competition in the marketplace.
and SimCity Social The Sims Social from EA, plus the entry of Facebook itself into the market will make it more difficult to succeed. Plus, as Zynga has already made a name for itself in stealing ideas, it will be a challenge to get new franchises off the ground.
Dell has officially announced its plans to take the company private once again. Originally founded as PCs Limited in 1984 by Michael Dell, the company changed its name in 1988 when it went public at $8.50 per share. The stock has had its ups and downs in the decades that followed, and has had trouble maintaining cohesion on its board of directors, causing a focusing problem.
Through the years Dell Inc. has picked up a number of companies to add to its portfolio, but has never been able to figure out exactly how to integrate them into the company proper. Michael Dell and investment partner Silver Lake believe that going back to the setup from Dell's roots, namely owned and operated by Michael Dell personally, will give the flexibility for a single decision maker to right the ship.
Michael Dell said of the announcement,
I believe this transaction will open an exciting new chapter for Dell, our customers and team members. We can deliver immediate value to stockholders, while we continue the execution of our long-term strategy and focus on delivering best-in-class solutions to our customers as a private enterprise. Dell has made solid progress executing this strategy over the past four years, but we recognize that it will still take more time, investment and patience, and I believe our efforts will be better supported by partnering with Silver Lake in our shared vision. I am committed to this journey and I have put a substantial amount of my own capital at risk together with Silver Lake, a world-class investor with an outstanding reputation. We are committed to delivering an unmatched customer experience and excited to pursue the path ahead.
Not everyone is happy about the decision, however. Hit the break to find out why current investors, customers and employees aren't exactly thrilled.