Atari Gaming Headquarters -- Hasbro to Acquire Atari Corp. from JTS

Hasbro to Acquire Atari Corp. from JTS

Since its acquisition of Atari Corp. in July of 1996, JTS had been conspicuously silent as to its intentions with the storied video and computer game company. While Activision had, until recently, been negotiating with JTS over a planned buyout of Atari, talks apparently broke off sometime late last year.

With Hasbro's deep pockets and its plans to become more involved in the video game industry, its purchase of Atari -- for a mere five million dollars -- makes sense. By acquiring Atari Corporation (not to be mistaken from Atari Games Corp., a subsidiary of Williams), it has acquired just about all of Atari's games, patents and technology. With it comes the possibility of tapping into Atari's massive back library of classic game titles for update on modern consoles and computers. And given Hasbro's sales success with its previous title, Frogger, and with the Atari brand and properties to use, it is likely that Hasbro will continue to bring back the oldies but goodies. Furthermore, it isn't inconceivable that Atari's name may be used to launch a video game system (Project X?) for the next millenium, although it is a bit premature to speculate on Hasbro's plans for Atari at this point.

According to the Form 8K JTS filed with the Securities and Exchange Commission:

"On February 23, 1998, JTS Corporation (the "Company") sold substantially all of the assets of the Company's Atari Division, consisting primarily of Atari home computer games and the intellectual property rights and license agreements associated with such games (the "Atari Assets"), to HIACXI, Corp. ("HIAC"), a wholly-owned subsidiary of Hasbro Interactive, Inc., for $5,000,000 in cash. The purchase price was determined based upon arm's-length negotiations between the Company and HIAC. The Atari Assets were acquired by the Company in July1996 when the Company merged with Atari Corporation. There is no material relationship between HIAC and the Company, any of its affiliates, any director or officer of the Company, or any associate of any such director or officer."

Hasbro got all of Atari's hardware, this is obvious...

"Atari Hardware Platforms" means the following hardware platforms: Atari 2600, 5200, 7800, Lynx hand-held and Jaguar game system hardware, Atari 800, ST and Falcon 030 computer family hardware, TOS operating system, 8-bit operating system, and Portfolio palmtop computer.

They also have just about everything else...

"Excluded Assets" means the following assets:

These are things Hasbro does not get

"excluding furniture, money, disk drives etc... and

(f) Hardware embodying Intellectual Property (other than Seller's Intellectual Property) that is licensed from third Persons."

This is where the confusion is coming from, but if you look closely, it says...

"Hasbro does not get Intellectual Proerty, that is licensed from third persons. - Of course Hasbro could not get any third person companies intellectual property."

But Hasbro DOES get...

"Seller's Intellectual Property. "

So clearly Hasbro does get Atari's intellectual property.

So what is intellectual property, you ask?

"Intellectual Property" means any or all of the following and all statutory and/or common law rights throughout the world in, arising out of, or associated therewith:

(i) all patents and applications therefor and all reissues, divisions, renewals, extensions, provisionals, continuations and continuations-in-part thereof;

(ii) all inventions (whether patentable or not), invention disclosures and improvements, all trade secrets, proprietary information, know-how and technology;

(iii) all works of authorship, "moral rights", copyrights (including derivative works thereof), mask works, copyright and mask work registrations and applications;

(iv) all industrial designs and any registrations and applications therefor;

(v) all trade names, logos, trademarks and service marks, trademark and service mark registrations and applications together with the good will of the business symbolized by the names and the marks;

(vi) all computer software including all source code, object code, firmware, development tools, files, records and data, all media on which any of the foregoing is recorded;

(vii) Uniform Resource Locators, World Wide Web site addresses and domain names;

(viii) any similar, corresponding or equivalent rights to any of the foregoing;

(ix) all documentation related to any of the foregoing; and

(x) all goodwill associated with any of the foregoing.

"Key Marks" means each of the following marks: Atari, the Fuji logo, Asteroids, Battlezone, Breakout, Centipede, Combat, Crystal Castles, Millipede, Missile Command, Night Driver, Pong, Ultra Pong, Tempest, Warlords and Yar's Revenge.

Atari Gaming Headquarters will be sure to keep you abreast on this historic event and we'll be reporting back to you when we hear comments from JTS, Hasbro and the SEC on this matter.