Visit Atarimax Store

Free-Net Logo
The Atari SIG Historical Archive
Created and hosted by:

Article #576 (635 is last):
From: Michael Current 
Subject: Hasbro to Buy Atari from JTS
Posted-By: xx004 (Atari SIG)
Date: Thu Mar 26 10:31:12 1998

from Next Generation Online,

the SEC filing itself is at:

                    Hasbro to Buy Atari from JTS

                    According to SEC documents and inside sources, JTS
                    will be selling all of its Atari holdings to a
                    subsidiary of Hasbro.

                    March 11, 1998

                                        JTS Corp merged with Atari back
                                        in July of 1996, but since that
                                        time it has done little with
                                        the heritage that it held when
                                        it acquired all of Atari's
                                        games, patents and technology.
                                        It would now seem that Hasbro
                    has had its eye on Atari and will be buying the
                    former assets of Atari at a price of $5 million.

                    According to the Form 8K JTS filed with the SEC

                    "On February 23, 1998, JTS Corporation (the
                    "Company") sold substantially all of the assets of
                    the Company's Atari Division, consisting primarily
                    of Atari home computer games and the intellectual
                    property rights and license agreements associated
                    with such games (the "Atari Assets"), to HIACXI,
                    Corp. ("HIAC"), a wholly-owned subsidiary of Hasbro
                    Interactive, Inc., for $5,000,000 in cash. The
                    purchase price was determined based upon
                    arm's-length negotiations between the Company and
                    HIAC. The Atari Assets were acquired by the Company
                    in July 1996 when the Company merged with Atari
                    Corporation. There is no material relationship
                    between HIAC and the Company, any of its
                    affiliates, any director or officer of the Company,
                    or any associate of any such director or officer."

                    The report goes on to detail the exact platforms
                    that Hasbro will gain from the purchase:

                    "Atari Hardware Platforms" means the following
                    hardware platforms: Atari 2600, 5200, 7800, Lynx
                    hand-held and Jaguar game system hardware, Atari
                    800, ST and Falcon 030 computer family hardware,
                    TOS operating system, 8-bit operating system, and
                    Portfolio palmtop computer."

                    On the title side of the arrangement, Hasbro will
                    be getting the following pieces of intellectual
                    property and then some:

                    "Key Marks" means each of the following marks:
                    Atari, the Fuji logo, Asteroids, Battlezone,
                    Breakout, Centipede, Combat, Crystal Castles,
                    Millipede, Missile Command, Night Driver, Pong,
                    Ultra Pong, Tempest, Warlords and Yar's Revenge."

                    Hasbro has experienced excellent sales success with
                    its previous retro title efforts and with the Atari
                    brand and properties to use, it's likely that
                    Hasbro will continue to ride the retro wave of
                    financial goodness.

                    A spokesperson for JTS offered little insight into
                    the sale, merely stating that he could "neither
                    confirm nor deny the sale." He went on to say that
                    if there had been such a major deal completed there
                    would have been a press release issued.

                    Strangely though, as Atari passes into the hands of
                    Hasbro, it ends the company's jaunt with JTS
                    raising some probing questions. The SEC approved
                    Atari's "merger" with JTS on the premise that JTS
                    would make a good faith effort to keep the Atari
                    side of business alive. They "absorbed" $50,000,000
                    plus from Atari's coffers based on that premise. In
                    a little more than a year, JTS sells what's left of
                    Atari for $5,000,000. What happened to all that
                    money? What investments went into satisfying the
                    SEC commitments and understandings? Was this fair
                    to ATC investors?

                    Jaguar titles that were released after the merger
                    had long since been completed (Fight for Life, Iron
                    Soldier 2, etc.) which means that there had been no
                    new development of titles. Sources close to JTS
                    have indicated that at that point only one major
                    project was in R&D at that time (a PC graphics
                    converter which is obviously far outside the scope
                    of any project Atari would have worked on).

                    Numerous Jaguar developers have indicated that
                    after the merger (and even before the merger was
                    complete), all new contracts with Atari/JTS were
                    discouraged and milestone rewards for existing
                    contracts were not infrequently 're-negotiated'.
                    Based upon these accounts, the attempt to keep the
                    Atari side of the business running didn't quite
                    seem like a 'good faith effort'.

                    Next Generation Online is still awaiting comment
                    from Hasbro and the SEC on the matter.

Visit Atarimax Store