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Atari acquires Cryptic Studios

Publisher enters the MMO space, with 3 titles planned by the end of 2011

Atari has announced that it has acquired US-based MMO developer Cryptic Studios in a performance-linked deal.

The company, previously responsible for City of Heroes and City of Villains, which made over USD 100 million for NCsoft, is in production on three titles, to be released over the next three years.

Champions Online is slated for a 2009 launch, while a Star Trek MMO will follow in 2010 and an as-yet-unannounced game will be released in 2011.

Additionally the deal will see some of the studio's technology make its way into other Atari titles, as well as powering the portal.

"The acquisition of Cryptic Studios brings to Infogrames an outstanding creative organisation, with a proven track-record of success in the fast-growing MMO category," said David Gardner, CEO of Infogrames/Atari in a statement. "Cryptic's success is founded on leading-edge technology and the vision of a seasoned executive management team.

"I am impressed with the tools and technology that Cryptic has developed to make MMOs less expensive to build. Creating vast worlds and interesting interactions can be very people intensive but with the use of Cryptic's toolset they have a proven way of cutting average production costs in half. This is exactly the type of company we wanted to acquire in order to build Atari for the 21st century.

And John Needham, CEO of Cryptic and former Sony exec, added: "We share a common vision with Atari and their leadership team. With our game development and online platform technology skills, we're very excited about the opportunities that this unique combination with Atari creates. I am committed to helping Atari grow into a leading online game company and look forward to being part of the team."

The deal itself comprises of an initial USD 26.7 million upfront cash payment, with an estimated maximum earn-out of around USD 27.5 million to be made up of cash and Infogrames shares.

Additionally the performance-related bonus could see as much as USD 20 million paid in cash or stock if Champions Online and Star Trek's 2010-11 revenues outperform set undisclosed targets, payable in August 2010 and May 2011.