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Q4, year end losses leave Atari's future in question

Atari has posted its fourth quarter and fiscal 2006 financial results, revealing an annual loss of USD 67 million and once again casting doubt on the company's ability to continue as a going concern.

Atari has posted its fourth quarter and fiscal 2006 financial results, revealing an annual loss of USD 67 million and once again casting doubt on the company's ability to continue as a going concern.

For the fourth quarter ended March 31st, Atari posted net revenues of USD 54.7 million, down from USD 64.4 million in the same quarter a year prior. Publishing net revenue was posted at USD 47.1 million and distribution net revenue reached USD 7.6 million, compared to last year's figures of USD 52.7 million and USD 11.7 million respectively.

The company attributes the lower figures to a combination of fewer titles published as various intellectual properties have been sold to offset escalating debts, and the introduction of its GamersFIRST programme, which began June 1st and reduces the price of all existing PC, console and handheld titles to USD 19.95 at retail and via digital distribution.

For the full fiscal year, Atari posted net revenues of USD 218.7 million, compared to USD 407.8 million a year prior. Publishing net revenue was USD 165.5 million (USD 355.6 million in 2005) and distribution net revenue was USD 53.2 million compared to USD 54.2 million in the comparable year-earlier period.

Fiscal year net loss reached USD 67.1 million, a massive drop on last year's USD 5.7 million net income. The figures include restructuring costs of USD 8.9 million as the struggling publisher continues to shift its publishing strategy and instigate IP sales and studio closures.

A statement forming part of the financial report reads: "As the year-end results were substantially below the Company's expectations, the uncertainties resulting from the Company's financial condition raise substantial doubt about the Company's ability to continue as a going concern,"

Atari's chairman, CEO and chief creative officer, Bruno Bonnell, remains positive that the company can redress the balance and return to profitability, stating: "The Atari brand has stood for innovation and pioneering spirit for more than 30 years. As Atari executes on its strategic objectives, we must recapture what made Atari an iconic brand. During fiscal 2007, we will focus our efforts on established franchises, new major motion picture licensed IP with significant marketing campaigns, online products and titles for portable devices."

Fiscal 2007 releases include PlayStation 3, Xbox 360 and PC title Alone in the Dark, Test Drive Unlimited and a slew of current-gen and handheld titles. The company is also pushing towards the casual mass market sector in an effort to leverage its existing library of IP, in addition to creating new brands and franchises.

"As the industry and consumer demands continue to change, Atari is evolving and adapting to the new interactive environment," Bonnell continued. "We will continue to launch ground-breaking initiatives such as our GamersFIRST program in order to expand the marketplace and we plan to exploit our back catalogue in new markets."

"We anticipate the execution of these new initiatives coupled with the continued development of titles for next-generation consoles will drive the Company toward profitability and return value to our shareholder," he concluded.

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