OT: Atari is Back!

[Franklinnoble]

Well, ok... only sort-of.

Infogrames re-christens itself Atari
By Tony Smith
Posted: 07/05/2003 at 14:42 GMT


Infogrames is to change its name to Atari when NASDAQ opens for trading tomorrow. It will trade as ATAR.

A quick visit to the Infogrames web site this morning found us being redirected to www.atari.com, and now a story from Reuters confirms that the French publisher has adopted the name it acquired back in 2001.

Infogrames bought the right to the Atari name when it bought toy maker Hasbro's Hasbro Interactive division. Hasbro got it from JTS in 1998. JTS, in turn, bought Atari in 1996. Before then, Atari had many owners, including AOL Time Warner, known as Warner Communications back then. Warner bought Atari in the early 1980s, splitting it into Atari Games and Atari Corp. in 1984. It retained the Games division, which produced arcade titles, and sold Atari Corp. to industry veteran Jack Tramiel.

Atari was founded in 1972 by Nolan Bushnell, and went on to produce video games, most notably Pong. It soon entered into the home video console market, and in the late 1970s, the emerging home computer market. Its US home computer success was never replicated in Europe, where its 400 and 800, and later the 600XL and its successors, proved too expensive for computer users weaned on much cheaper Sinclair (Timex in the US) ZX-81 and Spectrum, and Commodore VIC-20 machines.

Atari Corp's 1985 ST did rather better, finding a keen audience among gamers and musicians, but it didn't really survive the mid-1990s.

Atari tried to get back into the console market in the late 1980s with Lynx, the world's first colour handheld games machine. In 1993 it released the world's first 64-bit console, Jaguar, but neither it nor Lynx proved a huge success. Nor did its Portfolio, an early foray into palmtop computing. The tablet-like Stylus ST Pad never made it to market.

Infogrames re-launched the Atari label in October 2001 and began publishing games under the brand. Now all of its upcoming titles will be released under the venerable moniker.

Why? Because the French company is increasingly becoming a US-based operation, with 65 per cent of its sales made in North America. Atari better reflects the companies increasing focus on the US. It's probably had enough of people mis-pronouncing its name as 'Infogames'. ®

Bootnote
The early Atari is also known as an incubator of Silicon Valley talent. Specifically, the two Steves - Jobs and Wozniak - struck up a partnership before Jobs joined Atari as a member of staff and Woz as an after-hours visitor (his day job was with HP).

One tale is told by Jobsologists of the two Steves' development of Breakout for Atari, with Woz working day and night on the sly to get up and running the arcade game machine Jobs had been put in charge of creating. The story is also told of Jobs pocketing almost all of the cash bonus Nolan Bushnell put their way to reward their efforts.

Jobs reportedly handed Woz half of the $700 bonus. Only later did Woz learn that Bushnell had handed them a total of $7000...

[mrskippy]

Very cool.

Too bad there won't be a new console. Or will there ... MSAtari Xbox 2.

[SackAttack]

Frankly, I think Atari is best served staying out of the console wars. Their last one was a stinker, and there's still some bad memories associated with how Time Warner ran Atari (and the industry) into the ground in the '80s. Games, yes. Consoles, hell no.

[Franklinnoble]

Originally posted by SackAttack
Frankly, I think Atari is best served staying out of the console wars. Their last one was a stinker, and there's still some bad memories associated with how Time Warner ran Atari (and the industry) into the ground in the '80s. Games, yes. Consoles, hell no.

I agree with you there... there's not much room for competition in the console market right now... Sega has bowed out, and even Nintendo is getting beat up... Right now, I'd bet on Sony to continue to dominate unless Microsoft succeeds in making the X-Box an all-purpose PC and game system.

Which, by the way, begs the question... since the X-box is just a PC on steroids running a modified version of Windows, why doesn't Microsoft sell emulator software so you can play X-Box games on your PC?

[QuikSand]

Originally posted by Franklinnoble
Which, by the way, begs the question... since the X-box is just a PC on steroids running a modified version of Windows, why doesn't Microsoft sell emulator software so you can play X-Box games on your PC?

From a selfish perspective, that sounds like a good idea.

From a practical one... how do they make any real money doing this? Do they themselves produce and sell the Xbox software? (I am ignorant of things console, forgive me)

[QuikSand]

By the way, I like this quote:

"Atari was founded in 1972 by Nolan Bushnell, and went on to produce video games, most notably Pong."

Yes, I know that pong had its place, and deserves its place in history... but is that really what is most notable from the Atari corporation? I get the sense that this is another article by a business writer who doesn't really understand the subject (a very common happening in that field).

[moriarty]

Originally posted by Franklinnoble
Which, by the way, begs the question... since the X-box is just a PC on steroids running a modified version of Windows, why doesn't Microsoft sell emulator software so you can play X-Box games on your PC?

Hmm.. not sure that's completely true, but ok.

But why would Microsoft want you to play X-box games on your PC? So you wouldn't have to buy the X-box?? Not a real sound business strategy, when they can get you to fork over $200 for an xbox.

Sure they could charge $200 for the emulator, but they wouldn't be able to monopolize the other revenue generators like controllers, portable memory, Xbox live dealies, etc..

[moriarty]

Dola, back to the original topic.

Marketing question about the decision to change the name to 'Atari'.

For you the consumer, does this conjure up warm memories and sense of attachment to the good old days, and the impression that future 'Atari' games will be big on the fun factor? Or does it conjure up the notion of old, out of date technology, which would reflect negatively on any games released under this title?

I think it does the latter for me.

[Franklinnoble]

Originally posted by QuikSand
From a selfish perspective, that sounds like a good idea.

From a practical one... how do they make any real money doing this? Do they themselves produce and sell the Xbox software? (I am ignorant of things console, forgive me)

Microsoft LOSES money on the X-Box hardware. They make it back selling the games for $50 a pop. Even the ones that they don't develop themselves return a royalty.

I'd say that once the X-Box is more firmly established, they could actually improve their profit margin by just selling emulator software to anyone who has a PC with a fast enough processor and video card and enough RAM to do it (as well as a DVD-ROM drive to read the X-Box discs).

[mrskippy]

The completely forgot the myriads of other Atari produced titles of the late 70s/early 80s.

My idea of Atari and consoles ... that's why I put MS Atari Xbox on there. I think the only way Atari does a console is through a partnership with one of the existing makers and Microsoft would seem the most likely candidate.

The name would esentially just be that ... a name. Something to sucker people into buying an Xbox.

As for Sony, they can fall from grace at anytime. Another Japanese company came into the fray in the mid 80s, with as much fanfare as Sony in the mid 90s.

Nintendo put the axe into Atari and Mattel (Intelivision) with the original NES. The system dominated until Sega brought out the Genesis (the original Sega system was no competition) and forced Nintendo to come out with a nextgen console (the Super NES).

Nintendo and Sega would dominate through the early 90s, until Sony came along. Sony forced Sega to release the ill-fated Saturn and Nintendo to put out the cartridge-based N64.

The Saturn bombed. The N64 held its own, mainly the younger audience, but with its higher-priced, cart-based games, Nintendo lost its long-standing leadership role.

Sony, which many expected would fall by the wayside like others producing high-end, CD-based machines, ended up dominating the market. They had produced a winner and had support from the industry. The PlayStation was a groundbreaking system.

Sega retreated to work on the Dreamcast. This was supposed to be the machine that would unseat Sony or at least give it a real competitor. While it was a solid system, the machine lacked support and ended up flopping. Sega was forced out of the console market and focused on what it does best -- games.

Sony's PlayStation 2 also played a role in driving the nail into the Dreamcast coffin. And it also gave Sony an important lead over to other rivals.

A year after PS2, Microsoft released its Xbox, Nintendo its GameCube and for the first time gave the industry a credible three-way race. Sony would maintain its dominant leadership position. The real race was for number two.

While many figured Xbox would be number three behind Nintendo, it has managed to be the number two console. But Nintendo's GameCube has held its own and as it releases remakes of classic titles is likely to give Microsoft some grief.

The future of the industry rests in the next generation PlayStation 3, Xbox 2, and whatever follows the GameCube. The question remains, can anyone knock Sony from the top, the way it knocked fellow Japanese rivals in the mid 90s?

Nobody expected Sony to do what it did, so never count out another company stealing its thunder.

[Franklinnoble]

I think Microsoft has the best shot at usurping the console lead... just because they've got assloads of cash from their core business to pump into the project, and the system has tremendous cross-platform and multi-function potential.

[Bee]

Originally posted by Franklinnoble
I agree with you there... there's not much room for competition in the console market right now... Sega has bowed out, and even Nintendo is getting beat up... Right now, I'd bet on Sony to continue to dominate unless Microsoft succeeds in making the X-Box an all-purpose PC and game system.

Which, by the way, begs the question... since the X-box is just a PC on steroids running a modified version of Windows, why doesn't Microsoft sell emulator software so you can play X-Box games on your PC?

Probably compatibility problems.

[moriarty]

Originally posted by Franklinnoble
Microsoft LOSES money on the X-Box hardware. They make it back selling the games for $50 a pop. Even the ones that they don't develop themselves return a royalty.

Is that true? Hard to imagine they could lose money at $200 a pop considering today's computer prices. Then again, I guess if they designed a special processor it could get pricey considering it's not as mass produced.

I would supsect your second sentence might be why they wouldn't create an emulator (assuming they could technically). They can collect royalties for games they don't produce under the implicit assumption that the games will be used on the Xbox.

Legally, I'm not sure that they would be able to claim or justify the royalites if they created an emulator to allow the games they didn't develop to be played on a PC. Then again, I'm not a lawyer.

[Franklinnoble]

Originally posted by Bee
Probably compatibility problems.

What sort of compatibility problems? The X-Box runs on an Intel processor... should be a cinch.

[Bee]

Originally posted by Franklinnoble
What sort of compatibility problems? The X-Box runs on an Intel processor... should be a cinch.

video cards, sound cards, drivers, etc.

[mrskippy]

Microsoft does lose money on each Xbox sold. That was known from day one and something that made Microsoft investors jittery.

I can't remember the exact breakeven cost on an Xbox, but it was more than $299 (the initial Xbox price). Microsoft released it at that price to be in-line with Sony.

Instead, Microsoft and the console makers, make money off royalties. And I believe the income is better off exclusive titles produced by a third party, since the game is only available for Xbox and Microsoft doesn't have to pay any costs.

Somebody told me that it the average is about $7/game for royalties off a third-party game. That's pure profit and it adds up.

[Franklinnoble]

Originally posted by moriarty
Is that true? Hard to imagine they could lose money at $200 a pop considering today's computer prices. Then again, I guess if they designed a special processor it could get pricey considering it's not as mass produced.

I would supsect your second sentence might be why they wouldn't create an emulator (assuming they could technically). They can collect royalties for games they don't produce under the implicit assumption that the games will be used on the Xbox.

Legally, I'm not sure that they would be able to claim or justify the royalites if they created an emulator to allow the games they didn't develop to be played on a PC. Then again, I'm not a lawyer.

It's true. Even a bargain-basement PC will run you $400... the X-Box sports a 733Mhz processor, 64MB DDR RAM, a 250Mhz nVIDIA graphics processor (capable of HDTV output and max resolution of 1920x1080), 10GB hard drive, 5x DVDROM drive, 64bit 3D audio, and 4 USB ports. Not a bad bit of gear for 200 bucks...

As for the royalties and legalities and such... I'd have to see the contracts, personally... Even selling emulator software still makes Microsoft the sole proprietor of the X-Box gaming platform - whether it's on the console hardware, or your home PC.

[moriarty]

Interesting.

I wonder how many games would have to be sold per unit to make the picture profitable. E.g. If MS took a $49 hardware loss per unit, at $7 per game profit it would take 7 games sold per unit to break even.

I also would think the hardware costs of the Xbox would come down the more units that are sold which would make the economic situation better over time.

[sabotai]

From what I know of the X-Box (which might not be that much), it uses all common parts. The video card is a nVidia card. The sound card...I have no idea. But sound is not a hard thing to emulate at all.

The only problem I would see if emulating the OS that runs on the X-Box. I have no idea how much memory and processing power the OS uses...granted, it probably isn't much, but this is Microsoft, afterall.

And yes, they lose money on the X-Box sales.

EDIT: meant nVidia, not GeForce. (smacks self in head)

[mrskippy]

I wish I had the breakdown handy on figuring out game profits. I kept much of my video game industry background and source information when I was layed off, but I have it boxed up until the next job comes along.

[Franklinnoble]

Emulation can't be that difficult... I have an NES and Sega Genesis Emulator running on my PC now... and that hardware is completely foreign compared to what's under the hood of an X-Box...

[Bee]

Microsoft did a lot of things to try to avoid emulators (in an effort to curtail pirating). One of the things they did was make the hardware (like the nvidia video component) in the xbox to different specifications than those in most computers. When the xbox was first released, I think there were several "elite" hacking groups that were trying to break everything down and make an emulator. From my understanding they finally gave up because they determined it was basically impossible or at least much more trouble than it was worth.

[moriarty]

[Reports Franlinnoble to Sega copywrite police]

[Franklinnoble]

Originally posted by Bee
Microsoft did a lot of things to try to avoid emulators (in an effort to curtail pirating). One of the things they did was make the hardware (like the nvidia video component) in the xbox to different specifications than those in most computers. When the xbox was first released, I think there were several "elite" hacking groups that were trying to break everything down and make an emulator. From my understanding they finally gave up because they determined it was basically impossible or at least much more trouble than it was worth.

I'm saying it wouldn't be difficult for Microsoft to do it.

[Franklinnoble]

Originally posted by moriarty
[Reports Franlinnoble to Sega copywrite police]

Nothing illegal about owning an emulator.

Now, if I were to go and download a bunch of ROMS from games I didn't actually own, then I'd be breaking the law.... but I'd NEVER do that...

[SackAttack]

I don't have the figures handy just at the moment, but the pricing structure for a new console generally assumes that the average owner of that console is going to buy 5-7 games over the console's life span - or, on average, about one new game per year.

As a result, they price the console such that they can break even relying solely on the 'average' end user. That's all theoretical, and when it's put into practice it doesn't always work out the way they'd like it to. I think the Xbox is a great example - their pricing structure has been adversely affected by three major factors.

1) Competition. Running as the #2 horse globally right now, they simply can't afford to let any move Sony makes go unmatched, and they've even had to make a few moves of their own that have probably impacted the bottom line. They're packing in two free games with every Xbox sold these days, and while they're not exactly AAA-list titles, it's still two games that some of those people might have bought (and now won't, because they get 'em free). Add the fact that they've also bundled in Halo in some European countries, and that's another hit to their overall margin.

2) Cost. Microsoft probably loses more per console sold than either of their competitors, due primarily to trying to market an "all-in-one" machine that's more costly to build at the same price as the competition early in the console's lifespan, before the technology has grown sufficiently cheaper. This will be less of a factor as they gain market share, but for now, it's certainly impacting their bottom line.

3) Software selection. Their primary audience is males 18-25 (and that I have directly from a source at Microsoft, not that it should come as any surprise), but you'd be surprised how many young dads are buying Xboxes "for the kids," with themselves in mind. There's something of a drought when it comes to child-marketable games on the Xbox (although many of the games are at least kid-friendly, if not overtly aimed at them). That's gonna impact the bottom line, because without the games present to induce the 'nag factor,' fewer A and AA titles are going to sell. The shooters such as Castle Wolfenstein, Halo 2, Brute Force, and the sports games are always going to sell well on that platform, but some of the other genres might perhaps be neglected, which is going to limit the audience size.

That's not to say that I don't think the Xbox can do well - I think it has done, and will continue to do, extraordinarily well, all things considered. But I strongly doubt Microsoft is going to see any kind of a profit, let alone a net quid pro quo on this generation of hardware when all is said and done, and that'll have been a fairly unusual occurrance.

Anyhow, that's kind of a long-winded way of getting to the point: Microsoft won't ever release any kind of software to allow Xbox games to be playable on a PC because the Xbox is at the center of their home entertainment plans. Allowing PC owners to play Xbox games on their PCs would kind of torpedo that, since people would say "Why bother spending the $200?", and that would also negatively impact the Xbox Live service.

It's the same reason Sony sued Bleem out of existence - yeah, they're still getting their lucrative royalties on game sales, but such software is a deterrent to people who would otherwise buy their hardware, and that impacts the overall company strategy, regardless of whether they actually make money on the hardware or not.

[kcchief19]

Economics will tell you that sure, Microsoft lost money on the first X-boxes out the door -- it's a simple economic theory. Now if you're telling me that it costs Microsoft more to produce a single X-box than the wholesale price, I am VERY skeptical. There may be someone out there claiming that, but Microsoft didn't get where they are today be selling ANYTHING for less than it costs. Frankly, I don't see anything in the X-box that is cost prohibitive, especially considering that MS is going to put a hell of lot less wholesale for all the parts than most other manufacturers will.

As for the emulation, I know there is a hacker out there who has offered a prize to the first person to successful port X-box games to a PC. Microsoft could certainly do it, but from a QA standpoint, it's a hell of a lot cheaper to QA a game on the X-box than the PC, which requires QA on different hardware and configurations.

On the Atari question, I'm an old fart so I have fond memories and associations with the name Atari. I would be more likely to buy an Atari product than an Inforgrames product, which if you are a Joe Sixpack consumer in the U.S. you probably think they spelled "Infogames" incorrectly.

[Samdari]

Originally posted by sabotai
From what I know of the X-Box (which might not be that much), it uses all common parts. The video card is a nVidia card.

There is no video "card" per se. The graphics chip in the XBox is not the same as any on any of their PC products. It was specially designed for and is exclusive to, the XBox.

And I believe that while the XBox is #2 in the US, Nintendo is actually #2 globally, as the XBox is not even a blip on the radar in Japan.

[ISiddiqui]

Oh God, this sucks. I mean, Atari is a beloved name. Infrogrames is a fucking idiotic horrible company (look what they did to Civ3 and Moo3). They will trash the good name 'Atari'