David Gardner: We’ve being saying all along that we want to make the business online and so what we’ve decided to do is separate the distribution company. The distribution side will handle Infogrames, Namco Bandai and other publishers’ products exclusively. Atari will be focused on publishing products both online and packaged goods – but focusing more online.
Phil Harrison: The distribution entity Namco Bandai is buying into is the distribution business outside of North America – so that means European, Asian and Australian territories. It gives them access to a distribution operation that they have wanted for a long time, but it also gives us exclusive access to their product line-up.
They’ve had a variety of relationships with people like Atari, EA and Ubisoft, so this will mean all their titles will be distributed through this new venture.
Just for clarity, excluded from this transaction is all of our intellectual property, our publishing, our development operations, the Atari name and our development operations. So it’s establishing a distribution business that we are the majority shareholder of and having Namco Bandai be a part of it.
You’ve also recently revealed the formation of a London studio – why London, given that other territories benefit from tax breaks?
PH: The day that corporation tax planning becomes a factor in our decision making would be a happy day indeed, but it’s not yet the case. First of all, there is a world outside of France. Although we are extremely happy with the talent base we have at Eden, our studio in France, and the publishing team that we have in Lyon, we want to grow our business and part of that growth strategy includes geographic expansion.
And we have a huge talent base in the UK that we would like to attract to our organisation. [Hiring ex-Sony SingStar boss] Paulina Bozek is a great first step towards that – and we are looking at other geographic locations.
So more big names coming then?
DG: I sure hope so. We can’t do it alone – I don’t have the programming skills.
PH: And I’m a rubbish graphic artist, as everybody in the industry knows. I think we’re just looking for people who share our vision for the future of the industry and are excited about the challenge of making that vision come true. It’s in all disciplines – production, creative design, graphic design, technology, programming – but there’s a consistent theme in that we’re interested in individuals who have relevant experience.
There’s a clause in the Namco Bandai deal that states that they can buy the rest of the distribution company in five years – does this mean you’ll be stepping away from dealing in boxed product completely?
DG: We’re taking the first steps here. Over five years, Namco Bandai will probably own the majority of it, and it will no longer be our responsibility and Atari will be just an online company – within five years 90 per cent of our products will be online.
PH: There will be formats that will exist where delivering a product by disc into a retailer will be the first step in the relationship with the customer. If you look at the MMO business for example, the hybrid system of disc and online will continue for a number of years. This structure allows us a nice transition from one business segment to another.
I wouldn’t put a date on it just yet – it’ll be driven by the next transition of hardware platforms as to whether or not they have physical games associated with them or not.
Are you looking to re-build the Atari studio empire?
PH: It was unfortunate that through financial ill-health in the past Atari had to sell off studios to raise cash. But in fact what was sold off were fairly large, old-fashioned 20th Century studios which would have been quite difficult to re-invent online anyway. So maybe it was a blessing in disguise.
It’s still a little unclear how the new Atari will operate online – could you tell us a little more?
PH: Atari.com will be a key part of our future strategy, but some of our products and services will have their own clear identities and will emerge discreetly and separately from the site. But the back office functions and services will be shared.
There are plenty of casual games out there already… how will yours be different?
PH: The announcement you saw with the hire of Paulina Bozek indicates how we’re going to be doing that – we’re going to be hiring the absolute best quality people we can who have experience in delivering mass market, high-end, quality games experiences and bringing those skills and production capabilities to those new business models and distribution methods.
So you’ll have a big presence on Xbox Live and PSN?
PH: …and iTunes with the App Store and with Facebook, MySpace etc. – the company will be broadly online distribution agnostic.
What will be happening with Atari Inc in the US? Has your acquisition of the company been finalised?
DG: There’s an Atari US shareholders’ meeting on October 8th and that’s when it will legally close. We don’t see any reason why it’s not going to close – there were some questions asked by the US SEC which we’ve answered and they’ve approved the transaction so it’s really just a formality.
We own the majority of shares anyway. I’d say [CEO] Jim Wilson has proven to be a very good leader, he has enough industry experience and a media background that’s a wonderful blend for what we’re trying to do.
For the first time in a long time they’ve actually represented almost a quarter of our business – which is a lot comparatively. It’s moving in the right direction. Atari Inc had a strong quarter, with a strong new head of sales and new head of marketing.
PH: Once the transaction is completed on October 8th we will formalise the structure that we’ve informally been operating for a while. There’s one management team and it’s working very well with the US – we’re all working together.
Approximately half of my publishing and production team are based in New York anyway, so they are as integrated into the future strategy as anybody. The talent that has joined the company has worked really well in starting that transformation of the company.