Why did Phil Harrison defect to Atari and how will the company pay for his plans?
There's lots of good coverage out there about Sony Computer Entertainment worldwide studios topper Phil Harrison's defection to Infogrames/Atari, where he'll serve as president and be focusing on networked/online gaming and so on, but to my mind there are two very big unanswered questions:
-Why leave Sony? According to GamesIndustry, Harrison's answer at an event in NYC today was "the things that excited me the most, the things that turned me on as a gamer, and as a business person, and as a creative person were the future of our industry, the connected community experiences - all the things we're starting to see emerge that are really exciting players around the world. And those are the things I started thinking about in terms of creating a company or getting involved with a company to really shape and direct a business towards that future."
I think it's safe to say that between the Playstation Network, all of its downloadable games, and Home, Sony was getting pretty damned involved in "connected community" as well. So that's far from the most believable answer I've heard come out of a corporate executive's mouth lately. Clearly, something bad went down for him at SCE. Though it's hard to tell what, since the PS3 (and, one assumes, its games) are on a bit of an upswing and he has worked closely with Kaz Harai for a long time.
-How is Infogrames/Atari going to pay for Harrison and new CEO David Gardner's vision? This is a very financially troubled company. As of its last financial statement, it had just $188 million in cash, the vast majority of which it got from a new bond issuance in early January (before that, it had just $28 million). That may sound like a lot, but it's not in the videogame industry, especially for a company with no reliable sources of revenue, aka successful franchises. It's also pretty troubling considering that Infogrames/Atari has $152 million in debt.
If the new "Alone in the Dark" game (which I have seen, and looks decent) doesn't perform well, they're pretty much screwed for the year, it looks like, since it's their only major release. That's a very risky proposition in a business where the majority of products flop.
Still, no matter what was up at Sony, you've got to imagine Phil Harrison doesn't take a job without some prospect that he can try and implement his plans. The same with Gardner. So I've got to imagine there are good answers to both these questions. I just have no idea what they are.
PS I love this quote from Harrison: Atari is "the best opportunity that exists in the industry today to redefine, refocus and re-energies an incredible brand." That's a nice way of saying "Atari has no value and we can turn the brand into whatever we want it to be."
Chris Morris reports on the business and culture of video games and offers analysis of recent events and industry trends.
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Posted by: replica handbags | October 23, 2009 at 11:46 PM
Ben,
Is it really helpful to bash Phil and Atari when he is promising to bring some innovation to the industry and resuscitate one of the most valuable brands in the world - that happens to be a video game brand? From a pure PR standpoint, in the real world, 5 out of 10 people on the street may know what EA is, 6 out of 10 may know gta, 10 out of 10 know Atari. What is good for Atari, is good for our business. On an internal to the business side, independent developers have fewer options every day. It is much more positive to see an announcement of a strong industry veteran like Phil committing to build a publisher than EA Take 2 or Vivendi/Activision.
Does it really matter why he left Sony? The guy is an icon with invaluable experience. He is choosing to point it at Atari, they are lucky. He could have left Sony because he got tired of dealing in a big bureaucracy. He could have left Sony because he had done everything he wanted to do. He may not have like their roadmap. He may not have liked the view from his office. He may have been pushed out. He may be in love with the Atari brand. Does it really matter? The point is Atari got him and they are better for it. The fact he left, or the underlying motivation could not possibly detract from the value of his experience.
While your assessment of their financial position is inaccurate, even if they are accurate, the pre-Phil financials should not be a concern. Between Phil and David Gardner, there will no problem attracting capital. Take a look at the market. Investors want to invest in the video game business and they are starting to make investments. When they make their investments they want stability. Investment looks for experience and intrinsic value. Contrary to your interpretation of Phil's remarks, Atari has a lot of value. They have a strong library of game franchises, and now they have solid management. Sounds like an investment opportunity to me.
Before you write off the whole company, I also encourage you to look at their slate, there are some very high margin products in there for this year. They established a franchise with The Witcher which came in at a bargain basement price and exceeded one million units in sales and Legendary: The Box, releasing through Atari in Europe is on a lot of most anticipated lists. While it is a valuable franchise, and the company will definitely want to see brisk sales, the company is hardly relying solely on Alone in the Dark.
As a reporter and bridge to the Hollywood community, you don't have a responsibility to carry the standard of the industry, but you do have a responsibility to be accurate. Being snarky can be fun, being accurate is better.
Posted by: Keith Boesky | March 08, 2008 at 09:54 AM