ATARI FULL YEAR 2024 RESULTS
Atari®, a prominent name in consumer brands and interactive entertainment, has disclosed its audited consolidated results for the fiscal year ending March 31, 2024. The Board of Directors sanctioned these results during a meeting held on July 30, 2024, following a thorough audit by statutory auditors.
Operational Highlights for FY 2024
The year saw several key developments, including the acquisition of the GTI catalog of retro games, an update to its listing on OTC markets in the US, and the purchase of Atari 2600 titles and associated trademarks from M Network. Additionally, Atari acquired Nightdive Studios and Digital Eclipse, issued a €30 million convertible bond, and entered into a minority investment and strategic alliance with Playmaji Inc. The company also terminated its token project and provided a finalized claim for eligible ATRI token holders, acquired the games Awesomenauts and Swords & Soldiers from Ronimo Games, and launched the Atari 2600+ and 400 Mini gaming consoles. Furthermore, Atari secured the publishing rights for Rollercoaster Tycoon 3 from Frontier Development and invested $2 million in tinyBuild, Inc.
Financial Performance Overview for FY 2024
Atari reported a remarkable growth in revenues, doubling to €20.6 million from €10.1 million the previous year, driven by a surge in games revenue to €14.4 million, including contributions from Nightdive and Digital Eclipse. However, the current operating income stood at -€6.5 million, slightly worse than last year’s -€6.1 million, primarily due to increased amortization expenses linked to a new accelerated amortization policy. When excluding the impact of this policy, the current operating income would have been a loss of -€3.7 million. A net operating loss of -€12.8 million was recorded, significantly impacted by non-cash impairments and bad debt losses.
Wade Rosen, Chairman and CEO, remarked, “This year demonstrated positive progress across all business segments, a result of our strategic pivot towards classic gaming. Although still in the early stages, this transition is reflected in our revenue doubling this year. The successful integration of Nightdive and Digital Eclipse, along with the revival of the Infogrames label, are crucial steps towards ensuring long-term success.”
Key Highlights of the Year
Throughout the year, Atari concentrated its efforts on transforming operations and executing organic growth strategies:
Games – Atari launched 11 new games, including titles like Mr. Run and Jump, Quantum Recharged, and Rollercoaster Tycoon Adventures: Deluxe. Nightdive Studios also released several titles, including System Shock and Turok 3, while Digital Eclipse introduced The Making of Karateka.
Hardware – Following a restructuring of hardware operations, Atari focused on launching the Atari 2600+, which began pre-orders in August 2023 and delivered in November, expanding its product line to over 10 hardware products. The Atari 400 Mini was also launched in partnership with Retro Games LTD.
Licensing – Atari made strides in developing new licensing verticals and initiatives with reputable brands, which included the successful launch of the MyArcade GamestationPro with Dreamgear.
Atari X (formerly Web3) – In response to the challenging blockchain landscape, Atari X broadened its focus beyond Web3 to foster community engagement and collaborations with other business lines, while discontinuing its previously planned token project.
Corporate Developments and Investments
Atari finalized a $2 million investment in tinyBuild, Inc., part of a capital increase that concluded in January 2024, granting Atari a 7.9% stake in the company. Additionally, Atari acquired the publishing rights for Rollercoaster Tycoon 3, making it the sole publisher of the franchise, under a long-term licensing agreement with its creator, Chris Sawyer. The purchase included an initial payment of $4 million and potential deferred payments of $3 million.
In July 2023, Atari communicated its inability to develop a new token due to regulatory and commercial conditions, instead offering eligible ATRI token holders a mechanism to receive a fixed number of third-party tokens. This initiative was aimed at supporting the community that purchased ATRI tokens from a prior joint venture.
Financial Summary and Revenue Breakdown
For the fiscal year concluding on March 31, 2024, Atari reported total revenues of €20.6 million, a significant increase from €10.1 million the previous year, driven by strategic initiatives and contributions from newly acquired studios. Games revenue doubled to €14.4 million, bolstered by €6.7 million from Nightdive and Digital Eclipse. Hardware revenues skyrocketed sevenfold to €4.2 million, attributed to the Atari 2600+ launch and other hardware projects. Licensing revenues rose to €1.8 million, reflecting growth in new opportunities, while Atari X revenues dropped to €0.2 million as the focus shifted from Web3 to community engagement.
Consolidated Income Statement Overview
The cost of goods sold rose from €2.2 million to €5.8 million, influenced by higher royalty payments and costs associated with hardware sales. The gross margin improved from €7.9 million to €14.9 million. Research and development expenses surged to €12.0 million, reflecting increased consolidation and amortization costs from acquisitions. Marketing expenses increased as well, supporting the launch of new games. Despite these increases, general and administrative expenses decreased to €7.8 million due to cost-cutting measures. The current operating loss stood at €6.5 million, marginally worse than the previous year.
Operating income for the year was -€12.8 million, impacted by non-cash items, including a €3.6 million impairment and a €4.0 million provision for bad debt. The consolidated net loss for the period amounted to €13.5 million, compared to a loss of €9.5 million the previous year.
Balance Sheet Overview
As of March 31, 2024, total assets increased to €78.1 million from €25.2 million the previous year, largely due to acquisitions, including goodwill from Nightdive and Digital Eclipse. Current assets also rose as cash positions improved.
Equity and Liabilities Summary
Equity decreased slightly from €7.8 million to €6.8 million, while non-current liabilities surged to €57.5 million, primarily due to convertible bond debt and earn-out liabilities from acquisitions. Current liabilities also increased, reflecting the financial commitments associated with recent acquisitions.
Future Outlook
Atari plans to maintain its focus on enhancing its IP portfolio across all business segments, leveraging the capabilities of Nightdive and Digital Eclipse to support its retro-focused strategy. Upcoming initiatives include a robust pipeline of game releases, expansion of the Atari “+” product line, and ongoing development of licensing opportunities. Atari X will continue to evolve its community engagement initiatives, while the company will remain open to further acquisitions that align with its strategic goals.
Conclusion
Atari remains a significant player in the interactive entertainment industry, known for its rich history and iconic franchises. The company is committed to innovating and expanding its offerings to engage audiences while navigating the evolving landscape of gaming and technology.
