Three Game Makers Near Sideline

In recent weeks, Atari (ATAR Quote), Midway Games (MWY Quote) and Majesco Entertainment (COOL Quote) have reported slumping sales, deteriorating bottom lines, disappointing guidance and/or management shake-ups.

While executives at each company generally tried to brush off concerns by pointing toward the future, some investors and analysts are starting to question how much of a future exists at all.

Each company is struggling to define its identity and what markets it's going to pursue, analysts say. But these struggles are coming at a tough time in the industry, with sales slowing and development costs rising in preparation for a new generation of game consoles. ...