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Atari agrees to buy classic game maker Digital Eclipse for up to $20M

Atari has agreed to buy classic video game maker Digital Eclipse for up to $20 million in cash and stock.

The deal includes $6.5 million up front in cash and stock as well as a potential bonus of $13.5 million over 10 years.

Atari is already the owner of some of the world’s most iconic consumer brands and interactive entertainment such as Pong and Breakout. And now it is picking up Digital Eclipse Entertainment Partners Co. (“Digital Eclipse”), a game development studio originally founded in 1992.

Emeryville, California-based Digital Eclipse is focused on the digital restoration of classic video games.


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The acquisition of Digital Eclipse will allow Atari to expand its internal development capabilities and utilize Digital Eclipse’s industry-leading experience and proprietary technology. In joining Atari, Digital Eclipse will grow its business and capabilities by expanding its development capacity and access to world-class intellectual property and will leverage Atari’s management expertise.

By adding Digital Eclipse, along with Nightdive Studios in May 2023, Atari will be able to further support its retro-focused growth strategy.

Digital Eclipse is dedicated to preserving gaming’s heritage and telling the stories of gaming history through archival releases and interactive documentaries. Digital Eclipse pioneered commercial video game emulation well before it was a household concept and today Digital Eclipse is one of a select few development studios recognized as leaders in retro-focused development.

Digital Eclipse games include Street Fighter: 30th Anniversary, Mega Man Legacy Collection, SNK 40th Anniversary Collection, Teenage Mutant Ninja Turtles: The Cowabunga Collection and Disney Classic Games Collection, which all sold millions of units and were critically acclaimed. More recently, Digital Eclipse developed the Atari 50: The Anniversary Collection which has been labeled as the “new gold standard” for games compilations and was one of the highest rated titles of 2022.

Digital Eclipse’s most recent projects include the launch of The Making of Karateka and Wizardry: Proving Grounds of the Mad Overlord in Early Access on Steam.

Since inception, Digital Eclipse has produced over 250 games and developed long-standing relationships with leading publishing and development partners in the industry to deliver amazing video games and collections. With its innovative proprietary technology, Digital Eclipse is now leading this category in sales, critical reception and innovation.

Atari 50 marks the 50th anniversary of Atari.Atari 50 marks the 50th anniversary of Atari.
Atari 50 marks the 50th anniversary of Atari.

Wade Rosen, chairman and CEO of Atari, said in a statement, “Digital Eclipse is the best in the world at what they do. They have a deep love and respect for the history of the games industry, and are renowned for developing critically acclaimed projects based on historic franchises. Digital Eclipse, along with Nightdive, are in perfect alignment with Atari’s DNA and renewed purpose. I’m personally excited to see where we can push the boundaries of retro innovation together.”

Andrew Ayre, CEO of Digital Eclipse, said in a statement, “Atari and Digital Eclipse share the same ethos when it comes to celebration and preservation of gaming history. It’s an exciting combination, and I am confident this will serve Digital Eclipse and our fans extremely well as we grow our business and expand our capabilities.”

Mike Mika, president and creative director added, “Our experience collaborating on Atari 50: The Anniversary Celebration was revelatory. The trust that Atari showed our team, and our clear mutual love and respect for the content, positioned us to produce something truly remarkable. I know Atari will continue to champion our approach and that we will be bringing fans exciting new projects for years to come.”

Financial terms

The purchase price of Digital Eclipse will consist of an initial consideration of $6.5 million payable at the closing of the acquisition, of which $4 million will be in cash $2.5 million in newly issued Atari ordinary shares, as well as a remaining earn-out of up to $13.5 million, payable in cash over the next ten years based on future performance of Digital Eclipse.

It is expected that the acquisition of Digital Eclipse will be completed in the coming days.

In addition to the cash consideration, Atari will also acquire a portion of the shares in Digital Eclipse directly and the purchase price of such shares corresponding to $2.5 million will be paid by way of set-off against the issuance of newly issued Atari SA shares.

The reserved capital increase will result in the issuance of 20,165,794 new Atari shares. As a result, Digital Eclipse shareholders will together hold upon completion of the capital increase 4.6% of Atari’s share capital. The determination of the number of Atari shares to be issued is based on the 20-day volume weighted average price of Atari shares on Euronext Growth Paris until the signing date of the purchase agreement of €0.1169, in accordance with the terms of the delegation to the board of directors.

The majority of Digital Eclipse shareholders, holding in aggregate approximately 95% of Digital Eclipse capital, have agreed to a 1-year lock-up on their Atari shares as from the closing of the acquisition.

Atari shares are listed in France on Euronext Growth Paris (ISIN Code FR0010478248, Ticker ALATA) and OTC Pink Current (Ticker PONGF).

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