Atari (ATAR) announced Monday that James Caparro will replace Bruno Bonnell as its CEO.

Caparro, who will also become the video game publisher's president, will assume the CEO role immediately. Bonnell will remain Atari's chairman and chief creative officer.

A board member of Atari since February 2002, Caparro has headed up a number of different entertainment-related companies. Most recently, he served as chairman and CEO of Entertainment Distribution Corp. Previously, he served as CEO of WEA, the distribution arm of

Time Warner's

(TWX)

Warner Music Group.

The leadership change comes as Atari and other video game software companies prepare for the transition to the next generation of video game consoles. With development costs expected to increase markedly, some analysts have predicted that smaller video game developers such as Atari, a subsidiary of French video game company

Infogrames Entertainment

, will struggle to compete.

In recent trading, Atari's stock was up 2 cents, or 1.1%, to $1.93.