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Atari's US arm files for Chapter 11 bankruptcy protection

The US arm of pioneering computer entertainment firm Atari has filed for bankruptcy protection, as it looks to separate itself from troubled French parent firm Atari SA.

According to the BBC, Atari Inc and three related companies - Atari Interactive Inc, Humongous Inc, and California US Holdings Inc – are looking to secure third-party funding of some $5.25 million (£3.3m) to continue developing digital and mobile games independent of bankruptcy proceedings.

"With this move, the US-based Atari operations seek to separate from the financial encumbrances of their French parent holding company, Atari SA," Atari Inc said in a statement.

Atari SA has been experiencing financial difficulties for some time now, with US operations representing one of the few bright spots for the complexly structured organisation.

The statement continues: "The Chapter 11 process constitutes the most strategic option for Atari's US operations as they look to preserve their inherent value and unlock revenue potential unrealised while under the control of Atari SA."

Founded in 1972, Atari is widely regarded as forming part of the vanguard of the gaming industry. Responsible for early hits like Pong and Asteroids, as well groundbreaking consoles like the Atari 2600 and Atari 7800 (see image, top), the firm's more recent efforts have migrated away from physical retail games to digital-only titles with some success.

It has been a turbulent start to the year for global technology interests, with news of Atari's fiscal wranglings in America following the decline of three UK high street chains.

Photography specialist Jessops entered administration at the start of January and has since ceased trading, while entertainment retailer HMV and DVD rental outlet Blockbuster have also handed their affairs over to bean counters in a bid to preserve their respective brands.