Deep-dive Q&A: How Atari’s new bosses plan to bring the company back from the brink

Atari is still a name that everyone—even those outside of the games industry—seems to know.

And yet for most people the name is synonymous with a period of gaming that’s long gone. Atari conjures up images of wood-clad consoles and dingy, neon-lit arcades. Oh, and a bunch of ET cartridges buried in the New Mexican desert.

That’s a bit unfair, seeing as the company put out a semi-steady stream of games after that period passed away. It wasn’t enough, though, and Atari recently filed for bankruptcy. It was in this most dire of times that gaming’s progenitor was rescued by former employee Fred Chesnais, now CEO of Atari.

Atari under Chesnais is a revitalized company. There’s an Alone in the Dark reboot in the works, as well as a proper PC successor to Rollercoaster Tycoon 3. And…a new version of Asteroids?

I sat down with Chesnais and Atari COO Todd Shallbetter recently to discuss Atari’s new strategy, where the two see the company heading, and a ton of other topics. The full transcript is below.

PCWorld: Why make a big games push with Atari again?

Frederic Chesnais (FC), CEO of Atari: First, Atari’s been here for a long time. I think the team today has been here for about ten years on average, if not more. I was CEO/COO of many divisions and entities of the group fifteen years ago. I stayed there for eight years, I left, created my own games. Then when Atari filed for bankruptcy I decided to buy it back, so to say.

It’s not really “Why now?” It’s more like, “What happened during the five or six years during which Atari was still doing games, but maybe was not as present or was doing other types of games?”

Now we’re back trying to be really relevant in the PC world. Why PC? Because I think it is the best platform. It’s the most open. You can reach out to a lot of people. It’s very flexible. And for the last few years I’ve been doing a lot of PC games myself, so for me it was natural. When you look at the franchises we have, such as Rollercoaster Tycoon—yeah, it’s a PC game, it’ll be released on PC again with the new one. For me it was really obvious as the first choice for the big game for the comeback of Atari.

At the same time we are also pushing in other directions. It’s not just about games. We also do licensing, so we are launching Atari Flashback, which is a replica of the original Atari 2600. And there will be more. We’re also launching two casino platforms, one that is for real money outside of the US and in selected states in the US, and then we have a social casino that will be virtual money.

So it’s games, casino gaming or gambling, and then licensing. We’ve been absent for at least eighteen months. Atari filed for bankruptcy in January. It’s over, it’s behind us, and now we’re very pleased to bring the games. That’s very exciting.

Todd Shallbetter (TS), COO of Atari: And I think, to the “Why now?” part—as Fred said, he came back and kind of rescued the company frankly and gave us this opportunity to be completely scaled. We have a very experienced core team, and it affords us the opportunity to take this catalogue of over 220 trademarked Atari [intellectual properties]…the sky’s the limit when you start with that sort of resource.

Fred came in, we’re recapitalized, we have a great nimble team, a very creative team, an aggressive and hungry team. In this space it’s certainly a departure from the publisher models of past. It affords us the opportunity to really exploit these IPs.

FC: When Todd says we are organized differently, it’s true. Our business has changed dramatically during the last fifteen years. Fifteen years ago, even in just the PC world, you had to have a box, you had to have distributors all over the place. It was very expensive to make a game. Today we can just do a game and distribute it ourselves or with the help of great partners such as Steam.

And production has changed as well. I come from a world where I think the business model of the motion picture industry is really relevant, because we’re all doing entertainment. The model where you have, like a movie production studio, where you have the executive production, the brand, the marketing, you don’t want to have all those stages inside your own company. So what do you do? You go to the best.

We do the same. We go to the best studios and we try to make the best games, but after that we stay very nimble. If there’s another opportunity we’ll go to another studio that’s maybe the best at what it’s doing.

So I think the organization is today very focused and very limited to the core team and the core experience. After that we go to the best guys to have the best games. You cannot have all the Spielbergs of the world inside your own studio. It’s just impossible. But what you can do is try to find them and work with each other.

How do you move Atari forward and not just rely on the back catalogue of 220 IPs and the accompanying nostalgia?

FC: First, in the game world we are creating new IPs. The new one that’s been announced is a game for the LGBT community called Pridefest. That’s part of the DNA of Atari—to invent, to go after new audiences and reach to a lot of new people and new gamers. It’s also part of my DNA because when I left Atari I went out on my own and created fitness games for the Wii and the Wii Balance Board.

In games we try to be really relevant. We create new IPs. We also try to reinvent existing IPs… [like] Alone in the Dark. You will hear a lot more about Asteroids in the next few weeks. It’s a PC game. It’s going to be a survival game on the asteroids. There’s also a lot of survival games for PC. In the games space we try to be very relevant.

We also try to go outside of games. Clearly gambling, Atari Casino, is outside of games and a way for us to reach out to a new audience. I can tell you the audience playing casino games is not the same as the audience playing Alone in the Dark. There’s some overlap always, but it’s not the same. We try to go outside of games, but it’s not a hit-and-run project. We’re going to be here for some time.

For the moment what we try to do is come back, be relevant, make sure we have the best games.

TS: And I would also add to that too, these developers we’re working with are using Unreal 4, Unity 5 shortly. Using these technologies and these tools to create next-gen sort of quality in these games. Just the distribution schema, there’s not the box, manufacturing, all that stuff. We’re going direct to the consumer and coming right into their boxes on their desks. That’s very important. We’re blessed with all these fans, and they’re really connected fans. We exploit that.

FC: Back to the business model and why I personally love PC games: You launch a game—take any game on Steam—you take the game on the day of release, you take the game one year later, two years later, it’s not the same game.

I’ve been involved with games released two years ago, I can tell you the game today is still the same but it’s not the same. The great thing about PC games is you can really engage with the community, you can listen to the community, you can fix your game overnight because we all make mistakes. There are always bugs in games, not because the developers are bad but because you simply can’t replicate a situation in the studio where you have thousands of computers. We’re creating highly sophisticated games, so we’ll always have bugs.

But to stay relevant in the business, when you have a great franchise, keep working on it. World of WarCraft is what, ten years old? When they released the game, who would’ve known ten years later it’d still be receiving updates and patches with new features? That’s the amazing thing about PC games. You start, and if you make a mistake you correct it. Sometimes you have to stop it because clearly there’s no market and no one loves your game. Okay, too bad, let’s move on to the next one.

But as a publisher, we can stay relevant and engage with the community for one year, two years, three years.

Do you consider your gambling initiative a way to fund riskier games on the narrative side or are they entirely separate?

FC: We’re in the business of making games. We have to stay on the same path. We have to make sure we stay solvent.

But I’d say money comes second. The first thing is “Can we create a game or product that will attract a lot of users?” Why casino? I feel like it was a natural step for us, instead of going in other directions. I think there’s a small bridge or step to go from games to gambling. After that I think we can maybe attract our audience from games to gambling a little bit.

It’s not purely a financial investment because otherwise I would put the money of the company somewhere else or I’d take more risks. It’s a question of taking advantage of the brand and pushing it towards where the people who know the brand are.

TS: And keep in mind there was an original 2600 game, Atari Casino. And as an adjunct to that, the original Pong machine was for a very different audience. We’re now very much a family-focused and inclusive company across the board, but these games were in nightclubs and bars and people were fighting to stack their quarters to get them in. It’s appealing to a little bit older demographic, and there’s a certain love of the brand in some of those demographics that’s very active in the casino space as well.

FC: And especially on the PC you have games and gambling, but you’ll have a new category soon which we call hybrid skill-based games. That’s where people spend their time and we’ll be there.

A few months back you discussed getting into hardware. You mentioned the Flashback earlier, but at the time you also talked about smart watches, et cetera. Is that still a plan?

FC: Yeah, it was an example we gave at the time. The key message we gave at the time was that we’re an entertainment brand. Clearly we are relevant in games, but we had the Atari 2600 at the beginning, so we are also a hardware brand. So it would be relevant for us to go into the hardware business.

That being said, you have two different questions. How, and for what type of product?

So how: we’re going with a licensing business model, and the Flashback is the first one. In the very short term there’s no plan to go direct with this type of business because it’s very complex, it’s very difficult, it’s really capital-intensive.

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The second question, once you’ve looked at how you do it, is what do you want to do? So we had examples, such as watches, such as consoles with the Atari 2600 and the Atari Flashback. There are many opportunities down the road. We’ll take our time. Think about, in general, gamified products—meaning a product combining the brand, some gamification, and a product that is really useful to our audience. We have no plans for this year—this is for the very long run. But I think we can be relevant with some very well-selected hardware products.

Again, this relies on capitalizing on Atari’s name, right? Even though Atari now is a very different company than, say, thirty years ago?

FC: It’s different because of course the world is different. Every piece of this is different than it was thirty or forty years ago. But yeah, we take advantage of the brand. There’s a difference between trying to make a new company and a new game without any name, or saying “Hey, we’re relaunching Rollercoaster Tycoon. Hey, the next installment of Asteroids will be here in six to eight months.”

We’re very motivated and excited to work on that, and hopefully the combination will provide an audience. If you look at Rollercoaster Tycoon—people have tried to make some rollercoaster games, but I don’t think they’ve been very successful so far. Because we have that in our DNA, we love the franchise, I hope that everyone will say “Wow, they were able to find the right team, put the right features, at the right time and deliver that to the market.”

It’s difficult to make a game, I can tell you. People think you just wake up and put a bunch of programmers in a room. It’s a little bit more complex than that.

It’s a great ride. We’re all passionate about the brand. All the guys have more than ten years with the brand. But that doesn’t mean we don’t make mistakes. We all make mistakes. We all try to learn from that. But I think we’ll make sure we stay relevant on PC. That’s the best way to interact with the audience, listen to the audience, and deliver modifications, upgrades, and corrections very rapidly.

What kept everyone at Atari for ten years even through the downswing?

TS: Pure love of the brand, in my case. And I think certainly for others. We believe in this. We believe in this font of creativity that it’s been, and it has been consistently. Even through some of those lows, there were some very good things happening. It was just a changing time in the industry.

FC: Look at me: I was there ten years ago when we launched Rollercoaster Tycoon 3. So it’s really the experience of a lifetime to be able, ten years later, not to program the game—don’t get me wrong—but to be able to put the resources so we launch a new one. People stayed because we loved the brand, and as time goes by we have more and more opportunities with the brand because more and more people know about the brand. If we wait another day, we have more opportunities.