FULL YEAR 2024 RESULTS
Atari, a prominent name in the consumer entertainment sector and a leading producer of interactive experiences, has unveiled its audited consolidated financial results for the fiscal year ending March 31, 2024. The approval of these results came during a Board of Directors meeting held on July 30, 2024. The consolidated accounts have undergone auditing by the designated statutory auditors.
FY 2024 Operational Highlights
The fiscal year 2024 was marked by several strategic acquisitions and operational updates, including:
- The acquisition of the GTI catalog featuring retro games
- An upgrade to its listing on OTC markets in the United States
- The purchase of M Network Atari 2600 titles and their associated trademarks
- The acquisition of Nightdive Studios and Digital Eclipse
- A €30 million convertible bond issuance
- A minority investment and strategic partnership with Playmaji Inc.
- Conclusion of a token project alongside a finalized claim for eligible ATRI token holders
- The acquisition of Awesomenauts and Swords & Soldiers from Ronimo Games
- The launch of the Atari 2600+ and 400 Mini gaming consoles
- The acquisition of publishing rights for Rollercoaster Tycoon 3 from Frontier Development
- A US$2 million investment in tinyBuild, Inc.
In post-closing developments, Atari also relaunched its well-known Infogrames publishing label and acquired Totally Reliable Delivery Services and Surgeon Simulator from tinyBuild Inc. Additionally, the company secured the Intellivision trademarks and various game rights.
FY 2024 Financial Performance Summary
Atari experienced a significant increase in revenues for FY 2024, with total earnings reaching €20.6 million, a notable rise from €10.1 million in the previous year. Game revenues alone accounted for €14.4 million, aided by contributions from Nightdive and Digital Eclipse since their acquisition dates. However, the current operating loss was €6.5 million, slightly worse than the previous year’s loss of €6.1 million, largely due to increased amortization costs associated with a new accelerated amortization policy. Excluding the impact of this policy, the operating income would have been a negative €3.7 million. Overall, the operating income for the year stood at a loss of €12.8 million, influenced by non-cash impairments of intangible assets and bad debt losses from a licensing agreement.
Wade Rosen, Chairman and CEO, remarked, “This year has seen positive momentum across all business areas, stemming from a strategic pivot towards our classic gaming roots. Although this transformation is still emerging, our results, including the doubling of Atari’s revenue, highlight its effectiveness. The successful integration of Nightdive and Digital Eclipse, along with the revival of the Infogrames label, are foundational steps for our future success.”
Highlights of the Period
Throughout the year, Atari concentrated on reshaping its operations and executing its organic growth strategies:
Games – The company released 11 new titles, including Mr. Run and Jump, Quantum Recharged, Days of Doom, and several others. Additionally, Nightdive Studios launched System Shock and Turok 3, while Digital Eclipse released The Making of Karateka and began Early Access for Wizardry: Proving Grounds of the Mad Overlord.
Hardware – Following a reorganization of its hardware division in the previous fiscal year, Atari focused on launching the Atari 2600+. This commercial campaign began with pre-orders in August 2023, leading to timely deliveries in November 2023. The Atari “+” product line has since expanded to include over ten unique hardware items. The Atari 400 Mini was also launched in partnership with Retro Games LTD at the fiscal year’s end.
Licensing – The company made strides in building new licensing opportunities across diverse categories and regions, successfully launching the MyArcade GamestationPro with Dreamgear and initiating an eCommerce initiative for RollerCoaster Tycoon.
Atari X (formerly Web3) – In a challenging blockchain environment, Atari X has evolved from a singular Web3 focus to a broader, community-driven initiative. This includes collaborations across different Atari business lines, exclusive merchandise releases, and the launch of Atari Club. Atari also concluded its previously announced token project, offering a fixed number of third-party tokens to eligible ATRI holders, which ended in September 2023.
Other General Corporate Developments
Investment in tinyBuild – Atari agreed to invest US$2 million in tinyBuild, Inc., as part of a capital increase announced in December 2023. Following the completion of a US$12 million capital increase on January 30, 2024, Atari now holds 7.9% of tinyBuild’s share capital.
Purchase of RCT 3 – Atari has secured the publishing rights for Rollercoaster Tycoon 3 from Frontier Developments, becoming the sole publisher of all key titles within the franchise, managed under a long-term licensing agreement with its creator, Chris Sawyer. The initial payment for this acquisition was US$4 million, with an additional potential deferred payment of US$3 million.
ATRI Token – In July 2023, Atari announced its inability to launch a new token due to regulatory and strategic concerns. Instead, it provided a mechanism for eligible token holders to receive a fixed number of third-party tokens, a move made voluntarily to support community members who purchased ATRI tokens from a former joint venture, finalized in September 2023.
Brand and eCommerce – Atari.com has been developed as a vital e-commerce platform with enhancements in scalable operations, homepage and product page reviews, onboarding of new licensees, and targeted marketing efforts to support the holiday season and the Atari 2600+ launch.
Financing – The company successfully completed a €30 million offering of senior unsecured convertible bonds, with parts of the subscription paid through debt set-off and cash. Additionally, Atari secured €9.8 million in loans from Irata LLC to support its operations and game acquisitions.
Acquisitions – Throughout the year, Atari executed several acquisitions aimed at enhancing its retro-gaming publishing and development capabilities, enriching its portfolio of intellectual property, and expanding its community ecosystem with the purchase of AtariAge.
Breakdown of Revenues by Lines of Business (M€)
FY24
- Games: €14.4
- Hardware: €4.2
- Licensing: €1.8
- Atari X: €0.2
- Total Revenue: €20.6
Atari’s total revenue for the fiscal year ending March 31, 2024, reached €20.6 million, a substantial increase from €10.1 million in the previous year. This growth reflects the company’s strategic focus and the contributions from Nightdive Studios and Digital Eclipse following their acquisitions. The revenue growth amounted to over 104% at current exchange rates and approximately 103% at constant exchange rates.
Games: Revenue from games doubled from €7.2 million to €14.4 million, including €6.7 million from Nightdive Studios and Digital Eclipse.
Hardware: Revenue from hardware surged sevenfold to €4.2 million, driven by the Atari 2600+ launch and other hardware initiatives.
Licensing: Licensing revenue increased from €1.3 million to €1.8 million, supported by new opportunities and expanded sales through Atari.com.
Atari X: Revenue dropped to €0.2 million from €0.9 million as Atari shifts its model from a Web3 focus to community engagement and collaboration.
Consolidated Income Statement Summary (M€)
FY24
- Revenue: €20.6
- Cost of goods sold: (€5.8)
- GROSS MARGIN: €14.9
- Research and development expenses: (€12.0)
- Marketing and selling expenses: (€1.2)
- General and administrative expenses: (€7.8)
- Other operating income (expense): (€0.6)
- CURRENT OPERATING INCOME (LOSS): (€6.5)
- Other income (expense): (€6.2)
- OPERATING INCOME (LOSS): (€12.8)
- Cost of debt: (€0.7)
- Other financial income (expense): €0.1
- NET INCOME (LOSS) FROM CONTINUING OPERATIONS: (€13.3)
- NET INCOME (LOSS): (€13.5)
Atari’s cost of goods sold increased significantly from €2.2 million to €5.8 million, driven by higher royalty expenses and costs associated with hardware units sold directly through its website. Gross margin improved from €7.9 million to €14.9 million.
Research and development expenses rose to €12.0 million, reflecting the consolidation of costs from Nightdive and Digital Eclipse, along with changes in amortization policy. Marketing expenses also increased to €1.2 million as Atari invested in new game launches. General and administrative costs decreased to €7.8 million due to cost improvement initiatives.
The current operating loss for the year was €6.5 million, slightly worsening from the previous year’s loss of €6.1 million. The change in amortization policies contributed to this outcome, with the operating loss for the period amounting to €12.8 million after accounting for non-cash impairments.
Consolidated Net Income
For the fiscal year, the consolidated net income reflected a loss of €13.5 million, compared to a loss of €9.5 million in the prior year. Costs associated with debt included €1.5 million in interest on convertible bonds issued earlier in the year, alongside other financial commitments.
Balance Sheet Assets (M€)
FY24
- Non-current assets: €68.1
- Current assets: €10.0
- Total assets: €78.1
Atari’s non-current assets rose significantly from €18.1 million to €68.1 million, primarily due to goodwill from acquisitions and increased intangible assets linked to R&D and game purchases. Current assets also grew from €7.1 million to €10.0 million, reflecting a stronger cash position and increased trade receivables.
Equity & Liabilities (M€)
FY24
- Total equity: €6.8
- Non-current liabilities: €57.5
- Current liabilities: €13.8
- Total equity and liabilities: €78.1
Atari’s shareholder equity decreased slightly from €7.8 million to €6.8 million. Non-current liabilities surged from €9.5 million to €57.5 million due to the convertible bond issuance and earn-out liabilities from acquisitions. Current liabilities also rose, comprising estimated earn-out obligations and shareholder loans.
Outlook
Looking ahead, Atari plans to continue executing its strategy centered on monetizing its intellectual property across all business lines. The company intends to leverage the capabilities of its newly acquired studios, Nightdive Studios and Digital Eclipse, to bolster its retro-focused strategy.
In terms of games, Atari aims to invest in a robust pipeline of releases, including titles from both its internal development and its acquisitions. The hardware segment is expected to grow with the expansion of the Atari “+” product line and innovative collaborations. Licensing opportunities will be pursued across various markets, while Atari X will focus on developing its Web3 ecosystem through partnerships.
Atari will also remain open to potential acquisitions or minority investments that could enhance its portfolio and add value to its operations.
Consolidated and Annual Accounts Publication
The audited consolidated and annual accounts are now available. The Universal Registration Document for FY2024 is set to be published shortly.
About ATARI
Atari is a pioneering interactive entertainment company renowned globally, known for its diverse portfolio of over 400 unique games and franchises, including iconic brands such as Asteroids®, Centipede®, and RollerCoaster Tycoon®. With offices in New York and Paris, Atari continues to shape the gaming industry across generations.
Atari shares are listed on Euronext Growth Paris and OTC Pink Current.
Disclaimer
This press release contains forward-looking statements based on current assumptions and expectations of Atari’s leadership team. These statements are subject to known and unknown risks and uncertainties that may lead to significant deviations from anticipated results and events. The accuracy of statistical and forward-looking information has not been verified and is provided solely for informational purposes.
