Earthworm Jim Is Back

NEW YORK NY, May 10, 2006 - In an industry-shaking, earth moving announcement, Atari, Inc. (Nasdaq: ATAR) has claimed online and handheld rights to the globally celebrated Earthworm Jim video game. The Company is planning to develop a range of video games over the next five years for next-generation handheld and online systems.

"Atari is a company on the move, and as one of the most beloved video game characters in history, the return of Earthworm Jim marks an important day for Atari, the video game industry and consumers," said Atari, Inc. Chief Executive Officer Bruno Bonnell. "The Atari brand signifies innovation, imagination, entertainment and most importantly, fun. Our commitment to the Atari brand and investing in franchises that embrace similar traits, like Earthworm Jim, are the cornerstones in the Company's evolution."

Originally developed by Shiny Entertainment, Earthworm Jim wiggled his way to fame across a multitude of consoles and platforms in the 1990s for its detailed animation, polished platform-style gameplay and wacky absurdist humor. Earthworm Jim for next-generation handheld system, in development by Shiny, is a side-scrolling-action-packed platform game set in a cartoon-like, humorous and challenging world bursting with first-class animations, 3D visuals and ear-tickling audio. As the original set the benchmark for the bizarre and absurd, Earthworm Jim will raise the bar on the wacky, zany and extraordinary for today's generation of gaming.

Earthworm Jim remains true to its past while revels in all the delights that today's technology and portable gaming advancements offer. The story unfolds through the gameplay situations Jim finds himself in, and through the characters he meets and environments he explores. Jim continues his fight against the Queen and her allies, while his love for Princess-What's-Her-Name grows, and his ever-lasting friendship with Peter Puppy is still a key element in his life. Like its predecessors, the game will feature imaginative and outrageous characters, playground-like-open-level-designs that are ripe for exploration, and a slew of puzzles, power-ups and zany environments. All characters, environments and effects will be crafted in 3D and Jim will sport a new look that is sleek and fresh. An expanded arsenal of moves and attacks will be available and two-player competition modes provide extended gameplay and unique experiences.

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About Atari
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 DRIVER, The Matrix (Enter The Matrix and The Matrix: Path of Neo), Stuntman and Test Drive®; and mass-market and children's franchises such as Nickelodeon's Blue's Clues and Dora the Explorer, 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.

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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; loss of our credit facility; 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, including our Annual Report on Form 10-K for the year ended March 31, 2005 and our quarterly reports on Form 10-Q, as amended.
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