Atari's managing director, Frederic Chesnais, recently explained to us how Rollercoaster Tycoon Touch helped bring Atari back, which, when Chesnais had taken over 2013, had $ 34 million in revenue and a paltry $ 1 million in revenue.
Now Atari reports that it has no debts and has recently closed 2018 with a good growth in revenues (27% in the last six months) and a strong operating income (+ 87% in the last six months).
I spoke with Chesnais about what he plans for the year to come. Atari plans to return to the hardware business with the launch of the 2019 home console Atari VCS. And Atari is making games again – from original titles like Days of Doom to classic remakes, like Tempest 4000.
Chesnais said that Atari is more fit than it was in the past due to the success of its Rollercoaster Tycoon simulation games, including Rollercoaster Tycoon Classic, launched in 2017. And the company has organized itself into four divisions: Atari Games, Atari Casino, Atari VCS (the console division) and Atari Partners.
Atari has $ 9.3 million in cash, the producer reported. He has $ 3 million in pre-orders for Atari VCS, and he recently sold Alone in the Dark and Act of War to THQ Nordic. The company has also recently started a blockchain partnership with Animoca Brands, which will collaborate with the blockchain versions of RollerCoaster Tycoon Touch and Goon Squad.
Here is a modified transcript of our interview.
GamesBeat: you've had some news on the profits to talk about.
Fred Chesnais: Right, for the six months ending at the end of September. Just a few words about the numbers and what they show. The numbers are very simple. Revenue grew 27 percent, with a profit margin of 20 percent of revenue. We are profitable. It is almost a doubling of revenue from operations. We are generating cash. I think that, regardless of how the markets react, the numbers are pretty good.
What they show is a couple of key messages. Our biggest division, Atari Games, is still the majority of our business. It takes time to restart a company. Two years from bankruptcy, two years to redeem the debt. Now, we're really rebooting. The games are still the core of the company and show excellent performance. This is the first message. We have a strong Atari Games division, which covers both games and licenses. This is software and software exploitation.
Our second business unit, the online casino, has started. Sometimes I think people do not understand what we're doing there, but for now, it's a license for our properties for real-money casino games. These types of businesses, which are regulated, take longer, but once you're in business and have good games, we're applying for online casino licenses. We are not doing anything physical. But even so, it takes time to build. We are in a pretty good position right now. I expect the second business unit to start delivering next year.
The third area, of course, is the console. These numbers do not include any number for the console. We have just collected the money we have collected and continued to work on the product. These numbers do not include any impact of the Indiegogo campaign or anything else related to the console. The console will start to hit in the next fiscal year and in the following years.
GamesBeat: Atari VCS collaborator Rob Wyatt has still worked on it? I know he was going to, and then, he had a skydiving accident and broke his leg a little while ago.
Chesnais: We have a very solid team that dives into the project. I did not check Rob because I worked at casino games. Michael Arzt, the head of Atari VCS, is really responsible for this.
In short, however, we have very strong numbers. The games are doing well as the heart of the business. The casino is starting to grow. The console, we have not announced any significant updates. The team will work on something after CES to provide an update. CES is not contributing anything to the [profit and loss] at the moment. We hope that for us it will be a strong growth.
GamesBeat: you have this deal with Animoca to make blockchain-based games.
Chesnais: Right. This was announced two days ago. I just gave an interview to that to explain what we're trying to do. Let me try to synthesize it. I think blockchain is here to stay. It is here to stay in many companies: finance, identity and even in games. In games, it will have a significant impact not only through games like CryptoKitties, but will also have an impact on developers. Everyone will create resources in the industry and, with blockchain, you will be able to tag, identify and track each resource.
Let's say that I create a one minute piece of music or an environment or an animation or a character, an avatar. With blockchain, you will be able to tag that asset, identify it and track it. Especially with things like music, animation or characters, if it's used along a path or in two games, if it's sold five or ten or a million times, we'll be able to track it down. As for the protection of the creations, it will be very interesting. This is one of the blockchain applications.
Within the games, we will see that as the networks grow, we will have more opportunities to play with things that we have never understood before. What we are doing with Animoca, we are creating a game using blockchain not only to have fun and try to make money, but also to try to understand and find new ways in which the blockchain will have an impact on our business and how we can use it to get more fun – and even more protection. These are two uses of the blockchain.
I am happy to work with Animoca. For the moment, what we have in mind is something similar, you create a coaster, mix it with another coaster, and then, you can share it or trade it or sell it and build your collection of coasters. This is one of the applications we are working on. But the bigger picture behind this – how can we use blockchain in our business? Let's start with a simple game, but everyone knows that we will find something that is both fun and more useful for the future. That's why we're doing it.
Blockchain is here to stay. It's the revolution for the next 20 years. Peer-to-peer decentralized registries will affect many industries. We do not want to be the last to wake up. We want to be among the first to work on it and think about how this can affect our organization.
GamesBeat: Are there any other things in 2019 that are becoming clearer to you as we get to the end of this year?
Chesnais: For our casino business in the United States, we are only licensing our properties to Scientific Games. We are not an operator. In Europe, our second area, where it is legal, France is a monopoly, so there is no way we can operate there – in the last two years we have licensed our properties, but we are going through the direct process in Europe and establishing operations to sell or export three types of games: scratch cards, slot machines and lotteries.
Our third area for that business – since we are not going to Asia, not even for licenses – is Africa, which is very promising. Many things have changed. There are not many competitors. We are in the process of acquiring regulatory licenses to manage online casinos in Eastern and Western Africa. Here, we will go directly. This is my goal for next year, especially with phone lotteries in key countries. For the smaller countries, we are working on licenses right now. It works quite well. I should be able to tell you more about GDC.
I know the numbers. I know what people are doing. I know most of the operators in the area. The numbers I'm seeing – we did not make any money for the time being, but we met the test in Europe. We know how the games are. We are planning an excessive delivery in 2019. It's a very interesting business, but people do not necessarily understand it in the United States.
GamesBeat: do you have something on your radar for CES?
Chesnais: We'll have the team there, but let's go to CES pretty much through our licensees – like those who make the Atari Pong table. They will have a great stand. Most of our licensees are there. But we are not doing anything direct for now. We will see in 2020.
GamesBeat: Regarding the general gaming market, what else stands out as an interesting opportunity or something to worry about?
Chesnais: Again, because we are restarting, we are making our games. Our simulation games have a very stable audience. Is growing. They are loyal. We are not subject to changes like the big waves of Fortnite against Call of Duty against Battlefield. For me, what's going on right now – it's more important for us to stay in the casual field and try not to get into bigger games or games.
We could do it. We could collect the money to play another game. For the moment, our strategy is still that we have a lot of things to do in simulation and strategy games. We know how to make these games. When I see what happens in other categories, I feel that we should continue to invest in what we know best. Of course, I keep an eye on what happens elsewhere, but strategy, simulation and casual are where we are strong. We do not want to add a new main area. We will stay with what we do best.
What I see in many areas is very volatile. This is almost the only industry, along with the movies, where you can have a new competitor who becomes the king, what, maybe two years? It's cute
GamesBeat: apparently the Chinese government has started approving mobile games again. The agencies are starting to highlight things that have been blocked for months. At night, you have a better image for mobile games.
Chesnais: On November 30th, we released our game, Rollercoaster Tycoon, in China. We reached number 47 in the app stores over there. I can send you AppAnnie screenshots. This is really a result for us. We do not do too many things like this because you can never be sure of your approvals. We will continue to work.
I feel that we have been partially approved because it is Rollercoaster Tycoon. It's a simulation game. He has no other message than "Build something fun and have fun". We are working in a studio based in Shanghai. They are big fans of the brand and have helped push the game in China.
GamesBeat: do you plan to do much more in China over time?
Chesnais: I keep my fingers crossed – but yes. We have two other simulation games – a transport game and a city building game – and our Chinese partner is examining us. We hope to have Chinese versions of those presented to the Chinese authorities. They are fun, casual, easy to play. So far, we have had success with Rollercoaster Tycoon and we can not wait to find out more.
It's more than just a translation, just exchange Chinese for English. Our studio put a lot of effort into creating a Chinese version of the game. We have changed a lot of resources to create a Chinese game created by Chinese that uses the main game mechanics of Rollercoaster Tycoon. We are also launching a Korean version. This is under definition by the end of January.
The future is promising. We will continue to work. We have a low head on the VCS. There is always plenty to do in these difficult and volatile times.