David Pierce has resigned his position as Atari, Inc.'s Chief Executive Officer under the terms of his employment agreement. Curtis G. Solsvig III, Chief Restructuring Officer, will assume Mr Pierce's responsibilities on an interim basis. An executive search has been initiated to find a successor.
"We appreciate David's support and commitment through a difficult period in the company's history and wish him well in his future endeavours," said Gene Davis, Chairman of the Board of Directors. Atari to refocus on publishing and distribution in North America
The company will re-focus its operations on publishing and distribution in North America, completing its withdrawal from the production business. Atari also announced that it has licensed its Test Drive franchise to Infogrames Entertainment SA under an agreement which includes a US$5 million advance royalty.
Restructuring initiative
Atari has determined to focus its resources on the publishing and distribution segments of the rapidly growing video game business. The company's operations will involve title acquisition, sales and marketing, and physical distribution of products from Infogrames, its 51% shareholder, and other selected partners.
In line with that goal, Atari has agreed in principle with IESA to terminate its Production Services Agreement in the near future. As a result, Atari will no longer provide production and quality assurances services to IESA. Rather, Atari plans to transfer certain employees and contract other staff on a project basis for a limited period of time.
As part of the company restructuring, Atari, Inc. will reduce its current workforce in order to re-align the company's cost structure with its ongoing business base.
The Test Drive agreement allows IESA, whose Eden Studios originally developed Test Drive Unlimited for Atari, to develop and market at least two new releases of the franchise during the life of the license. It is anticipated that the deal, signed last week, will assure the continued vitality of the franchise and will strengthen the relationship between Atari and its parent company while providing an important element in the on-going financial restructuring of Atari.
Solsvig III added, "Atari continues to take important steps to streamline operations and establish a winning business plan. We expect that the actions we are undertaking today will position us for the future as a preferred business and distribution partner."
As previously announced, Atari recently signed a deal with BlueBay High Yield Investments (Luxembourg) SARL for financial support in the form of a US$10 million credit facility as part of its overall financial restructuring. Blue Bay owns in excess of 20% of IESA's stock.
