Pecking at the Scraps
by Donald A. Thomas, Jr. (c)1998 (3/15/98)
As of 5:00 PM, Friday, March 13, 1998, JTS Corporation has released a
formal announcement regarding the recent sale of Atari properties to a
subsidiary of Hasbro Interactive. Details of this transaction are
accessible throughout the Internet and a compilation of these
materials can be found under "Hot News" at
http://www.L4software.com/icwhen. The JTS announcement comes
hot-on-the-heals of the discovery of an 8-K posted on the web site of
the Security Exchange Commission (SEC).
The news is exciting. Hasbro, a company focused on quality home
entertainment, has acquired the rights to Atari's home-based
properties, including patents and intellectual rights. Updates and
reissues of classic video games is proving to be a great way to
inspire new profits, and it's refreshing to us classics aficionados to
see companies realize that fact. Hasbro Interactive's release of
Frogger turned out to be fruitful, and they will be anxious to repeat
that kind of success by applying the same formula to other titles.
There are a few other reasons that Hasbro may have happened upon the
unusual deal that JTS placed at their doorstep. VM Labs, a small
company that might often remind people of 3DO in their early days, is
developing software for a new machine which is getting a veil placed
over it at this very moment. One of VM Labs attributes is the
well-known Jeff Minter who did spectacular remakes of Tempest and
Defender on the Atari Jaguar. VM Labs has already demonstrated his
latest work of their "Project-X". Some sources indicate that VM Labs
was very interested in other titles Atari had collecting dust in their
unguarded vault. VM Labs' bids to JTS Corporation fell short of
Hasbro's ability to step forward with cash - something that the
fledgling JTS needs very badly. Interestingly, it looks like VM Labs
may have gotten their hands on those titles after all. Hasbro
Interactive, many claim, is a "favored-nation" third-party developer
for Project-X.
It is very likely that these companies actually do not know too much
more about themselves than we what we find out. There exists a belief
that these companies survive based on infinite wisdom. That everything
that happens is part of some big conspiracy. Companies like for us to
believe that day-to-day decisions are based on business models that
they established for themselves.  It is critical that investors are
convinced that management makes decisions based on an armored plan of
action. The simple truth is that gaming and technology companies are
filled with people who are fresh out of school and enjoyed their
computer science courses a lot more than their history and business
management courses. Frequently, the people at the top are those who
were at the right place at the right time. Many of them barely spend a
full hour each week ever playing a video game. For instance, Leonard
Tramiel was the only one of the primary four at Atari (Jack, Sam,
Leonard and Garry) that really knew how to use a computer, much less
than program one. Jack finally had a non-Atari PC hooked up in his
office during the final months so he could track his investments on
the Internet. Sam has been "on-line" for a few years now, but I don't
think Garry really uses a computer to this day. I don't think I ever
saw any of them play a video game. If I did, it was definitely
Leonard.
I don't know what your thoughts are about the Hasbro acquisition of
Atari, but I would like to share some questions that come to my mind.
I ask these in a rhetorical spirit because I do not know if they can
be answered. The mainstream press was not much interested in Atari
when it was worth $50,000,000. I doubt they'll take much notice of it
with it being worth only $5,000,000. Until the press starts asking the
questions, I doubt there will be much motivation to answer them.
1.  JTS acquired Atari and a number of employees. What has happened to
    those employees, specifically those assigned to the "Atari
    Division"?
2.  Other than liquidating the material assets and inventory of Atari
    in a year and a half, what steps did JTS take to pro-actively turn
    that part of the company around?
3.  ATC investors purchased stock in a company that was in the video
    game business and being led to believe that their investments
    would remain in that business. What efforts were invoked by JTS to
    honor the spirit of those investments?
4.  Persons who have purchased Atari products in recent years (Lynx,
    Jaguar, etc.) have been led to believe that a responsible company
    would back these items should they ever cause damage or be in need
    of repair.  What steps have been taken to offer out-of-warranty
    repair and parts?  Which company has assumed those
    responsibilities? What steps has any involved company taken to
    inform customers about their options?
5.  JTS absorbed a sizeable inventory of product from Atari. What has
    happened to those goods?
6.  Specifically, how were the initial funds from Atari to JTS spent?
    Did any of the money go to management bonuses? If so, how much?
    How big was that Atari accounts payable?
7.  Did Atari or JTS actually start up any new software projects after
    their merger was announced?
8.  Where does mail addressed to Atari get routed? Who answers them?
    Are they returned? Are they thrown away?
Regardless of what the answers are and what new questions we ask,
Hasbro will have no interest to revive Atari. Atari was once a very
large company.  The predators are circling and buzzards are pecking at
the scraps.
It seems to me that the best way to keep classic gaming alive is to
pressure companies such as Sony Computer Entertainment and Nintendo
into releasing more and more retro titles. So far, there's quite a
library of classic game reissues on the PlayStation. These are not
rental titles. These are buy-and-keep titles. Titles that you'll want
to play again and again. These are titles that exploit the "fun
factor"; an attribute in so many Atari games… even the ones that were
scrapped.
### END ###
... Tree falls in forest. Hits Milli Vanilli. Someone else screams.
--- JetMail 0.99beta22
---------------