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Atari, Inc. Completes Its Strategic Divesture

Shiny Joins Foundation 9 Entertainment

NEW YORK, Oct. 2: Atari, Inc. (Nasdaq: ATAR) a leader in interactive entertainment, today announced the completion of the Company's strategic internal studio divesture through the sale of Shiny Entertainment to Foundation 9 Entertainment. The operational streamlining and portfolio refocus was announced by Atari in early 2006.

"The sale of Shiny Entertainment completes the final phase of our strategic restructuring," said David Pierce, President and Chief Executive Officer, Atari, Inc. "We now have a centralized organization that can utilize external studio execution while maintaining internal focus on creative development and production."

Atari will retain its current project planning formerly developed by Shiny, including Earthworm Jim. Financial terms of the agreement were not disclosed by the parties.

About Foundation 9 Entertainment

Foundation 9 Entertainment is a premier developer of interactive entertainment products and properties, and the largest independent games developer in North America. With studios in the San Francisco Bay Area, Vancouver, Boston, Los Angeles, Newport Beach, Eugene, and Charlottetown, Foundation 9 Entertainment is a development powerhouse, uniquely positioned to maximize the value of entertainment properties across all entertainment genres.

Through its studios and core brands, Backbone Entertainment, The Collective, Shiny, Pipeworks, ImaginEngine, and Digital Eclipse, Foundation 9 Entertainment has worked with the largest names in the game publishing world, including Electronic Arts, Konami, Sega, Capcom and Take-Two Interactive. The company creates titles for all age groups and all platforms, through licensed and original IP, as well as contract development and its studios have developed more than 300 titles, including more than 40 in 2005 alone. For more information, please visit: www.F9E.com.

About Atari, Inc.

New York-based Atari, Inc. (Nasdaq: ATAR) develops interactive games for all platforms and is one of the largest third-party publishers of interactive entertainment software in the U.S. The Company's 1,000+ titles include hard-core, genre-defining franchises such as The Matrix TM (Enter The Matrix and The Matrix: Path of Neo) and Test Drive ® ; and mass-market and children's franchises such as Nickelodeon's Blue's Clues TM and Dora the Explorer TM , and Dragon Ball Z ® . Atari, Inc. is a majority-owned subsidiary of France-based Infogrames Entertainment SA (Euronext -- ISIN: FR-0000052573), the largest interactive games publisher in Europe. For more information, visit www.atari.com.

Safe Harbor Statement

With the exception of the historical information contained in this release, the matters described herein contain certain "forward-looking statements" that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this release are not promises or guarantees and are subject to risks and uncertainties that could cause our actual results to differ materially from those anticipated. These statements are based on management's current expectations and assumptions and are naturally subject to uncertainty and changes in circumstances. We caution you not to place undue reliance upon any such forward-looking statements. Actual results may vary materially from those expressed or implied by the statements herein. Some of the factors which could cause our results to differ materially include the following: the loss of key customers, such as Wal-Mart, Best Buy, Target, GameStop and EB Games; delays in product development and related product release schedules; inability to secure capital; adapting to the rapidly changing industry technology, including new console technology; maintaining relationships with leading independent video game software developers; maintaining or acquiring licenses to intellectual property; fluctuations in the Company's quarterly net revenues and results of operations based on the seasonality of our industry; the termination or modification of our agreements with hardware manufacturers; and other factors described in our SEC filings.

The Company undertakes no duty to update any forward-looking statements to conform the statement to actual results or changes in the Company's expectations.

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