Original Author: Zen, PANews

Recently, the veteran arcade game company Atari released its financial report for the fiscal year ending March 31, 2023, showing a net loss of 9.5 million euros for the 2023 fiscal year. The company terminated its licensing agreement with the ATRI token, launched a new Web3 ecosystem plan "Atari X," and integrated Atari Web3 for unified operation. Despite unfavorable conditions in the blockchain market, Atari's Web3 revenue decreased by only 900,000 euros compared to the previous fiscal year, which was better than expected. Atari stated that it will continue to execute its Web3 strategic roadmap and plans to launch the Web3 technology center "Atari Club," while also expanding its partnerships in the blockchain and Web3 space.

Atari has now positioned its activities in gaming, licensing, hardware, and the Web3 field as the company's four major business lines. However, its Web3 revenue composition remains relatively singular, mainly coming from the sales of NFTs and other digital assets.

The Twists and Turns of the ATRI Token Come to an End

In fact, Atari was one of the earliest traditional gaming companies to enter the crypto industry and adopt blockchain technology. As early as 2018, the Atari Group licensed its brand to Infinity Networks, Ltd ("INL") with the hope of creating the Atari token and a decentralized platform to provide various forms of digital entertainment, from video games to movies and music. However, due to slow project progress, Atari eventually terminated its agreement with INL and turned to collaborate with the ICICB Group in Gibraltar. In early 2020, it announced the launch of the ATRI token and the Pong token named after its classic game, Pong.

In early November 2020, ATRI was publicly released on the Bitcoin.com exchange, during which issues such as problems with order processing, funds not being credited, and withdrawal delays of up to 16 hours arose. By the time participants in the public sale received their tokens, the price of ATRI had already plummeted. At that time, Atari stated that the mission of the Atari token was to "bring decentralization and universality to the video game and interactive entertainment industry." ATRI was intended to be used for purchasing and trading within the online multiplayer game Karma the Game of Destiny.

The tumultuous initial token sale sparked strong dissatisfaction among investors. Due to concerns about the lack of sufficient control and say in the management of the ATRI token, Atari announced the termination of all agreements with the ICICB Group and its subsidiaries in April 2022. The Atari Chain and the ATRI token, as well as their related websites created in collaboration with the ICICB Group, no longer had authorization, and ICICB no longer had the right to represent Atari or its sub-brands in any way. Atari took a snapshot of the ATRI token holdings, and holders would need to present their ATRI tokens in the future to participate in the exchange for the "upcoming token."

Difficulty in Launching New Token Projects

The termination of partnerships signaled the failure of the ATRI token, but Atari remained enthusiastic about the future of its blockchain-related plans. After giving up on the token, it still firmly believed that blockchain would continue to be an important part of its business and saw it as a new way to interact and collaborate with brand partners, players, and fans. In May 2022, Atari launched Atari X, a project that aimed to integrate Atari's blockchain interests into unified operations solely managed by the company. In line with the development of Web3, Atari has been continuously establishing strategic partnerships with companies in the crypto space, including The Sandbox, Nifty Labs, and Co:Create, all of which have played a role in the handling of their respective tokens.

However, the new token project ultimately failed to materialize.

Recently, Atari announced an update on its token, stating that due to changes and developments in the regulatory and legal environment related to cryptocurrencies, its original plan to launch a new proprietary utility token was forced to be modified, and it would not introduce a new Atari token. As Atari's main development partner, Nifty Labs had facilitated the snapshot and claiming of ATRI tokens, actively participated in the development of the Atari 50th Anniversary NFT series, and was once the primary developer driving Atari's new token project, exploring its utility, governance, and token economics. With the new token plan now "dead in the water," Nifty Labs was forced to halt its collaboration on the new token project.

Regarding compensation, Atari stated that it would provide a fixed quantity of third-party SAND tokens to each eligible ATRI holder identified in the snapshot taken on April 18, 2022. However, due to the limited quantity of SAND tokens, the claim would not be on a one-to-one basis, and the ratio of SAND tokens to ATRI tokens would be determined based on the total claims. The claim plan was set to begin on September 1, 2023, and run for two weeks. Atari stated that ATRI holders could continue to freely trade their ATRI tokens and mentioned that it did not intend to sell the 259 million ATRI tokens owned by the team before December 16, 2022 (equivalent to approximately $180,000 at the time of writing). Data showed that the circulating market value of ATRI had surpassed $200 million in April 2021, but as of the time of writing, its circulating market value was only around $980,000, and the token price hit a historic low, with a drop of approximately 20% in the past week.

Persisting with Atari X and Relaunching Atari Club

Despite repeated setbacks, Atari is unwilling to give up on its Web3 strategy. After abandoning its obsession with tokens, it still firmly believes that blockchain will continue to be an important part of its business and sees it as a new way to interact and collaborate with brand partners, players, and fans. The Atari X, launched in May last year, is currently the core project on which Atari is betting in the Web3 business. It seems that they are aware that Web3 games are the most effective way to engage with their brand and build a community.

Atari will be the first company to create tokens for Web3 games using the Co:Create platform. With the launch of the Co:Create platform, Atari can use Web3 to expand its ecosystem and foster deeper community connections. Co:Create completed a $25 million seed round in May last year, with support from A16z crypto, VaynerFund, Packy McCormick's Not Boring Capital, Amy Wu, as well as the teams behind RTFKT and Tessera (formerly fractional.art).

Co:Create's technology provides building modules for token rewards and utilities, as well as ongoing support for projects to create token plans that meet community expectations. With Co:Create, anyone can deploy EVM-compatible smart contracts through a no-code dashboard using only a web browser and a connected wallet to launch tokens on the test network. The contracts are fully owned by the project, and the platform is free to use. In addition, Co:Create will add new features to its platform, including token reward and utility contract extensions, role-based contract licensing, and other developer tools.

One of the known major plans for Atari X is the "reintroduction" of the Atari Club, which was first launched by the company in the 1980s. The new Club will serve as the center of the Atari X community, integrating nostalgia, gaming, and underlying Web3 technology to unite passionate players in a common ecosystem and provide exclusive rewards, merchandise, and experiences.

According to the annual report, Atari has conducted a review and forecast of liquidity risks for all its activities in gaming, hardware, licensing, and Web3, and without any external financing, its liquidity can support the continuation of activities as planned in the coming year. However, Atari's outlook for its Web3 strategy currently only involves continuing the development of Atari's Web3 ecosystem under Atari X and establishing partnerships and collaborations with leading blockchain and Web3 partners, without disclosing plans to develop Web3 gaming projects.

As one of the earliest traditional gaming companies to enter the Web3 industry, Atari, which is seeking change and development, needs to come up with something substantial.

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