October 31, 2023 [crocon media – msch] In a strategic move to bolster its retro gaming offerings, Atari, a global leader in interactive entertainment, has announced its acquisition of Digital Eclipse Entertainment Partners Co. This acquisition marks Atari’s continued commitment to its retro-focused growth strategy, following its earlier acquisition of Nightdive Studios in May 2023.
Digital Eclipse, based in Emeryville, California, has been at the forefront of the digital restoration of classic video games since its inception in 1992. The studio’s dedication to preserving gaming’s heritage is evident in its archival releases and interactive documentaries. Some of its recent notable projects include the “Atari 50: The Anniversary Collection,” which garnered significant acclaim and was dubbed the “new gold standard” for game compilations.
The acquisition will not only enhance Atari’s internal development capabilities but also leverage Digital Eclipse’s proprietary technology and industry-leading experience. This collaboration promises to bring fans exciting new projects that celebrate and preserve gaming history.
In terms of financial details, the purchase price for Digital Eclipse is set at an initial consideration of US$6.5 million, with US$4.0 million in cash and US$2.5 million in newly issued Atari ordinary shares. An additional earn-out of up to $13.5 million, based on Digital Eclipse’s future performance, will be payable in cash over the next decade.
A significant highlight of this deal is the issuance of 20,165,794 new Atari shares. Post-acquisition, Digital Eclipse shareholders will hold approximately 4.6% of Atari’s share capital. The majority of these shareholders have agreed to a 1-year lock-up on their Atari shares, ensuring stability and confidence in the merger.
While the stock market’s initial reaction saw a slight dip in Atari’s stock by around 5%, the long-term prospects look promising. The combined expertise of Atari and Digital Eclipse is expected to usher in a new era of retro gaming, catering to both nostalgic gamers and a new generation eager to experience the classics.
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