l
Namco buys controlling
interest in Atari
Steven Ross of Warner Commu-
nications and Masaya Nakamura
announced that they have signed a
definitive agreement under which
Namco has acquired the controlling
interest in Atari coin-op games
division.
The purchase came on the heels
of large losses for the fourth quarter
of 1984 reflecting big charges
associated with Atari and other
discontinued operations.
In the summer of 1984 Warner
sold the consumer division of Atari
to Jack Tramiel , founder and former
president of Commodore Interna-
tional , a major competitor of Atari .
Tramiel was not interested in
making the coin-op division a part
of the deal. Speculation spread
about Atari ' s future in the coin-op
amusement industry . Then at the
AMOA show in Chicago in October,
Atari introduced two promising
systems, Marble Madness and Paper
Boy, raising the optimism in Atari's
future .
Warner purchased Atari from
founder Nolan Bushnell in 1976 for
$28 million. At that time Atari was
reporting net profits of $3 .5 million.
Profits rose to $2 billion in 1982 then
sank to a little more than $1 billion in
1983 as the industry started a decline
that is still continuing.
Atari had moved to larger
facilities in Milpitas California but
was forced to return to Sunnyvale as
revenues plummented.
Atari had licensed games from
8
Namco in the past and employees of
Atari are confident that the associa-
tion will only help Atari. According
to Ross, "Namco is clearly the top
designer and producer of video
games in Japan, as well as a world
wide leader . I have known Mr.
Nakamura for many years and have
the highest regard for him and his
company . I am pleased about the
establishment of this venture and
look forward to worki ng with Mr.
Nakamura in the co ing years ."
Nakamura said, "We have had a
positive relationship with Atari for
many years and I lo k forward to
future successes in the coin-operated
video game business. "
•
Stern closes
Stern Electronics of Chicago
closed its offices on February 1. The
company , plagued by financial
problems, had filed for Chapter 11
of the Bankruptcy Codes in July of
1984, which calls for the company to
submit a reorganization plan to the
court while the court holds creditors
at bay.
However, Stern (and related
companies Universal Research
Laboratories and August Johnson
Company) sent its creditors notices
of Stern's intent to convert the
Debtor's Chapter 11 proceeding to a
preceeding pursuant to Chapter 7
which is liquidation of assets.
A trustee will be appointed by
the Bankruptcy court to liquidate
the company. The meeting was
scheduled to be held on March 8.
Stern Electronics was born when
Gary Stern and his father Sam Stern
bought Chicago Coin , an old
company in the industry started by
Sam Gensberg in th e 1930's. Stern
grew by acquiring Uni versal Research
Laboratories in late 1977 and
purchasing Seeburg i n 1980.
However, Stern ra into financial
difficulties in 1982 and got financial
aid from long time distributor Al
Simon . Though G ry Stern was
adamant against the coin-op amuse-
ment industry having any connection
with gambling, Stern started manu-
facturing gray area eq ipment in
1983. When lasers lo ked promising
to a sagging indust ·y Stern intro-
duced several laser games at the
1983 AMOA, none 0f w hich were
successful.
Stern sold Seeb rg to Ed Blan-
kenbeckler in the summer of 1984.
Stern joins severe-I major manu-
facturers in exiting the coin op
amusement indus ry i n recent
times, including Centu r i, Mylstar,
and Sega.
•
PLAY METE , March 1, 1985