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Atari CEO Angles for Rebound

It's an open question whether Atari (ATAR) is better known for being one of the video-game industry's pioneers -- or one of its persistent failures.

The company has gone through numerous incarnations since jump-starting the video-game era with its original console and hit arcade games back in the early 1980s.

Like that earlier incarnation, the current version of the company, now majority owned by French video-game maker Infogrames, is struggling.

The company's sales and bottom line have plunged. Its executive suite has been a revolving door since the departure of Atari CEO Jim Caparro a year ago; and some of its key games, such as Driver 3, have been busts.

But the company has bounced back before, and the new CEO, Bruno Bonnell, who also heads Infogrames, is hoping to lead the company's latest resurrection. Last week, in the wake of the E3 conference in May, I talked with Bonnell about his efforts to revive Atari.

TheStreet.com: What is Atari's strategy as the industry goes through the remainder of this console transition?

Bruno Bonnell: Atari is definitely not in the tanker category like [Electronic Arts (ERTS)], for instance. We're more into a very flexible, opportunistic attitude.

So, away from the $25 million budget that I'm [considering] now as [the] urban myth of our industry, we'd rather focus on what are people really willing to play.

If the $25 million budget is a "myth," what are you expecting to spend on developing next-generation titles?

It all depends.

Aside from Test Drive and Alone in the Dark, which are in the range of $15 million, our focus is probably more on [Xbox] 360 where you can make great games for $50,000. It's like the movie business: You have movies that cost $200 million plus, and you have movies which cost less than a million euros.

You can make great games for $50,000?

Yeah. [For Xbox] Live Arcade.

In the movie business, people accept the idea that you can spread the budget from, I would say, $5 million to $200 million. You know, in the games business, every game should be 25 [million dollars], otherwise it's a bad game. That's why I call it an urban myth. You have games [that] have cost us much less and made a tremendous profit.

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