Atari has really had a tough time. With credit troubles, a Nasdaq delisting, and continued losses, what's the approach now to get back on track?
Jim Wilson: There certainly was a time when Atari North America was struggling. Over the last year, a number of steps have been made with Atari Inc. and Infogrames to shore up the business, to simplify the way the companies work together, to get the companies to work more closely than they have in the past. Infogrames is a 51% owner of Atari Inc. and in many ways the companies should be and do work very well together. From a cash perspective, a number of things have been done in the last year, whether it's the credit line with Blue Bay investments or with Infogrames right around the time of our merger agreement, that have really helped stabilize the company from a cash flow standpoint. There has also been a focus on streamlining the company from a cost perspective. There were some initiatives in the fall to do that and we most recently focused on some initiatives that were happening in June.
Overall, the plan for growth has really been about building a strong North American sales, marketing, and distribution platform that allows us to build our franchises and build franchises from some of our key partners. By streamlining the company, by bringing in experienced game executives (whether Tim Flynn, SVP Sales or Jeff Reese, VP Marketing), the real emphasis for growth is a strong, experienced team that is going to build a strong North American platform. I think with that in mind, we can look to grow our company. I think we started to see some of those results. We are very focused on how we continue to grow as a best practices company – how we take a look at the portfolio of products we have and how we maximize that portfolio. In our first quarter, we put a lot of focus on looking at what our opportunities were for building our revenue story. That was [fueled by] the Dragon Ball Z launch, which continues to be a strong franchise for us, our Alone in the Dark launch, our Backyard Sports launch, and we also across the board saw a lift in our catalogue [sales].
From a portfolio perspective, although Alone in the Dark did well, making those big budget hardcore games is risky. Majesco, for example, used to put out one hardcore game after another and it nearly killed them, and then they switched gears to focus on the casual market and lower budget games for DS and Wii. Is that an approach we're going to see from Atari, or will we continue to see hardcore games?
I think we are fortunate because Atari and Infogrames are franchise owners. We have the benefit of looking into our franchise portfolio from which we can pull our overall product strategy. We are a company that has a very diversified approach on what our product strategy is. If you look at a franchise like Alone in the Dark, it's a bigger budget, console franchise, but we also have the benefit of the history of the Atari Classics or the N+ title, which is coming out in August, to really look at the growing mass market audience. From a risk perspective, we have the opportunity to be fairly well balanced, to have a diversified portfolio approach. You would expect to see from us products that fit both audiences. We have the benefit of having Phil Harrison and David Gardner really leading that global product discussion amongst all the executives worldwide about where we put our time and emphasis, what our overall portfolio strategy is going to be.
You're bringing N+ to the DS and PSP, but the Q1 revenue breakdown was heavily slanted towards PS3 and 360. Is Atari looking to do more on portables and on Wii?
Yes. At E3, we showed N+, a Jamie Oliver What's Cooking? title for the DS, the Backyard Sports franchise for the DS... There's certainly more that you'll see announced this year that will come out for the DS and PSP. Certainly on the Wii, we have opportunities that we'll be announcing also. Obviously, Backyard Sports on the Wii has done very well for us and will continue to be part of our franchise strategy there. So yes, you'll be seeing more on those platforms from us.