Atari defaults on payments for USD 50 million loan

Videogame publisher and developer Atari is facing renewed financial pressures, having failed to meet repayments on a USD 50 million loan from the HSBC Group.

The troubled firm was effectively in default of the loan as of December 31st, 2005, but an SEC filing from the company states that there is nothing more than "a nominal amount" outstanding from letters of credit.

The firm had been forced to ask for financial assistance from parent company Infogrames in August last year, in addition to approaching HSBC for "waivers of certain financial covenants" following a disastrous first quarter.

The second quarter results, ending September 30th, showed more trouble for the publisher, with losses of USD 25.2 million. Financial results for fiscal 2006 third quarter and nine-month period ended December 31st will be released on February 9th.

Atari's Q3 results are of paramount importance for the future of the publisher, with much depending on the sales performance of key franchise titles such as The Matrix: Path of Neo - which does not appear to have mirrored the phenomenal sales of its earlier Matrix titles - and Marc Ecko's Getting Up: Contents Under Pressure. The company is also scheduled to release the latest iteration in its Driver series, Driver 4: Parallel Lines, in March.