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Atari History :: Chapter 12 - Game over

1996 - So what happened, the Jaguar was a good product wasn't it?  The company had sunk cash into advertising right?  You could argue that Atari did everything right with the Jaguar, learning from past mistakes and making a determined bid to put all of its resources behind their product.  This is no exaggeration, as Atari killed every other product in development to ensure minds were focused on the Jaguar product.

But Atari hadn't foreseen the emergence of Sony into the gaming arena, and even before Sony had launched their "Playstation", developers were being courted by the deep pockets of the consumer giant.  True, the Playstation was still "vapourware" while the Jaguar was a real product available to the consumer, but Sony had begun selling their new machine long before it hit the shops.  But Playstation was only one factor that dogged Atari's Jaguar, because Atari were trying compete against a wide range of platforms from Sega, Nintendo and 3DO, and if that wasn't enough it seemed that the jump from 16-Bit to the 64-Bit Jaguar wasn't making life easy for the developers who were trying to get to grips with the new architecture.

This jump in performance meant that the lead-time for new software was taking longer than even Atari had anticipated, it was also costing the developers more money, and the Jaguar needed good software to survive.  With over 100 developers signed up to the Jaguar platform, it was expected that the Jaguar couldn't fail with this type of industry support, but while a few high profile developers took the plunge, the majority held back and waited to see the sales figures.  Initially, the Jaguar sold like hot cakes, but rumours about the new Nintendo 64, Sega Saturn and Sony Playstation held potential buyers back from parting with their money, and the developers in the meantime weren't going to back the Atari horse, until they saw the other runners.

Fate had worked against Atari, if it had been a year earlier with the Jaguar, perhaps it could have had that vital head start to aid software development, and perhaps, Atari could have weathered the storm and kept some of the developers on board with what could have been a much larger installed user base.  Of course, what actually happened is Sony and Sega stole the show, and the Jaguar was left on the shelves, for those within the company, the writing for the system was on the wall in 1995 because Atari couldn't compete on even terms with the might of Sony and Sega.

This was the year Sam Tramiel had a heart attack, and perhaps this unfortunate turn of events was the final screw in the coffin for the Jaguar, because Jack came back and took over the running of Atari while his son recuperated.  Sam was passionate about the Jaguar, and was major force behind the product, but the entire project had taken its toll and Jack most probably and sensibly had the health of his son on his mind.  It wouldn't have taken a rocket scientist to figure out that no amount of money could have saved the Jaguar in 1995.

Atari had money in the bank, approx $50 Million, most of this from investments made in 1994 when Atari had won $90 Million from Sega in an out of court settlement, and Time Warner had invested $12.8 Million in the company.  But in little less than a year Atari had spent over $50 Million trying to support a dying platform and Jack saw that the company's liquid assets were dwindling fast.  Another year of Jaguar support, and Atari could be bankrupt, especially when the Jaguar was failing to sell in any significant numbers.  Although Sam was back at work towards the end of 1995, Jack had already began to downsize the Jaguar project.

With reports in the press commonplace, Atari were obviously downsizing the company, but to what end, nobody really knew.  Some speculated that Atari may just leave the game business and concentrate on software, as the Atari Interactive brand launched, it seemed a good move.  Then, in 1996 as more employees were fired, and internal software development was axed, it seemed Atari may do what many feared, and exit the business for good.  Of course, Atari was still trading on Wall Street, so those rumours were laughed off officially by the company, but behind the scenes, Atari were looking for the nearest exit.  When the rental agreement on the Atari HQ expired in March 1996, Atari moved to smaller offices with an even smaller contingent of employees.

Atari were looking to buy themselves out of the video game business in some form or other, and talks began with a number of companies.  Eventually, Atari merged with JTS, a start-up disk drive manufacturer, with $50 Million of Atari money.  Support for Jaguar and continuation of the Atari brand was assured to share holders - this never happened, and only 3 more titles trickled out of Atari, and all Jaguar stock was liquidated.

:: Key Dates ::

On July 31, 1996, Atari Corp. became a JTS subsidiary.  JTS Corp., with
headquarters in San Jose, Calif., was founded in 1994 to design, manufacture and supply enhanced-capacity hard disk drives for the notebook and desktop personal computer markets.

On February 23, 1998, JTS sold its Atari Division to HIACXI Corp., a wholly-owned subsidiary of Hasbro Interactive, Inc., which is a subsidiary of Hasbro, Inc., for $5 million in cash.

JTS filed for Chapter 11 Bankruptcy Protection on December 11, 1998, and then converted it to Chapter 7 on February 28, 1999.

Hasbro Interactive began releasing many Atari branded titles from the vast back catalogue of Atari games for the PC and Playstation, and in a gesture to the Atari Jaguar community, also released the Jaguar system into the public domain after much pressure from the loyal Jaguar user base.  3rd party software development is now taking place since this notice from Hasbro.

Hasbro sold many of its property rights, including those of Atari to Infogrames, a French software development company on December 6th 2000.  Was this really the end of the road for one of the most recognised brands in the world?

In 2003, Infogrames changed its trading name to "Atari" worldwide (as AEX predicted in 2001 when we broke the news!).  The Atari "Fuji" logo still hasn't faded away into history, and with the Infogrames new identity, Atari is once more in the public eye... but unfortunately, only as a pale imitation of its former self...

1997-2003 Atari Time Machine/Atari Explorer - All trademarks acknowledged.


 1972 - the birth of Atari
 The world goes Pong crazy
 Launch of the VCS
 Atari grows up
 Just before the crash...
 1984 - The crash
 The new Atari Corporation
 Computer wars
 Playing the game
 Survival of the fittest
 Let's play games again
 1996 - Game over

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