STRATEGIC OPPORTUNITIES January 2016 Disclosure In this strategic - - PowerPoint PPT Presentation

STRATEGIC OPPORTUNITIES

January 2016

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Disclosure

In this strategic presentation, the terms "Atari“ and/or the "Company" mean Atari. The term "Group" means the group of companies belonging to the parent Company and all companies within its consolidation’s scope. This strategic presentation contains statements relating to ongoing or future projects, future financial and operating results, and other statements about Atari’s managements’ future expectations, beliefs, goals, plans or prospects that are based on current expectations, estimates, forecasts and projections about Atari, as well as company’s future performance and the industries in which Atari operate will

• perate, in addition to managements’ assumptions. Words such as “expects,” “anticipates,” “targets,”

“goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements which are not statements

• f historical facts.

These forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to assess. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. These risks and uncertainties are based upon a number of important factors including, among others: political and economic risks of our respective global operations; changes to existing regulations or technical standards; existing and future litigation; difficulties and costs in protecting intellectual property rights and exposure to infringement claims by others summarized in chapter 8 of the company’s annual report registered to the AMF under the number D15-0825 on August 4, 2015. For a more complete list and description of such risks and uncertainties, refer to Atari’s annual report in its chapter 8 for the year ended March 31, 2015. Except as required the rules and regulations of the AMF, Atari disclaim any intention or obligation to update any forward-looking statements after the distribution of this document, whether as a result of new information, future events, developments, changes in assumptions or otherwise. January 2016

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Table of Contents

• 1. Atari at a glance – Much more than video games
• 2. 2013-2015 Turnaround
• 3. Summary Financials / Cap Table
• 4. Key Investment Considerations
• 5. Exhibits:
• Games: A strong portfolio of games and IP ownership
• RollerCoaster Tycoon
• Licensing

January 2016

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1 – Atari at a glance - Much more than video games

January 2016

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Atari at a Glance

5

A Globally Recognized, Iconic Brand With an Unparalleled Catalog of Popular Games

January 2016

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Iconic Brands (Refer to full deck of games)

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$92

Million

$265

Million

$391

Million

$85

Million

$154

Million

$456

Million

$525

Million

More than $2 Billion of Historical Revenue

January 2016

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There is Much More Than Video Games

Time Magazine’s, “50 Best Websites 2012” “Pong! Atari Marks almost 40 Years of Gaming”

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Opportunities Across Media Categories

• Online casinos
• Hardware / consoles, drones, …: Atari is exploiting replicas of

the Atari 2600 and is looking at other licensing or business

• pportunities, such as drones.
• TV scripted series: On-going project with Alone in the Dark
• TV unscripted series: TV games “à la“ Wipe Out, …
• Web series
• Movies: Pixels with Sony – Ongoing deal with a Hollywood

major - Representation by Creative Artists Agency for additional licensing deals

• Comic books
• Merchandising on a broad scale

January 2016

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2 – 2013-2015 Turnaround

January 2016

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2013-2015 Turnaround

10 Janvier 2016

Atari ran into significant financial difficulties. Early 2013, the US subsidiaries filed for bankruptcy protection (Chapter 11). A few days later, Frédéric Chesnais and the Alden Capital fund took over.

• F.

Chesnais, is the former Deputy-COO of the Atari Group, and CEO of Atari Interactive. He left Atari in 2007-2008.

• Alden Capital is a New York-

based investment fund. Alden is not involved in the management of the Atari Group.

In 2013-2014,

• F. Chesnais

managed the exit of the US subsidiaries out

• f the Chapter

11 in the US From mid-2014, the new team relaunched game production and began implementation of a robust turnaround strategy.

2014 2013 2012

11 11

Atari is a company implementing a turnaround phase. Atari owns iconic brands in the video game industry and can capitalize

• n new opportunities outside of the videogaming market.

Simplified organization (external studios, digital distribution…) Opportunities outside of the videogame industry (casinos, drones, TV, licensing…) Turnaround, improved financial structure Cap table simplified

2013-2015 Turnaround

Atari is Back to Profitability

January 2016

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Today: A Simple and Very Efficient Structure

• Chesnais owns approximately 25% of the Atari Group, is Chairman of the

Board and CEO. He is the largest shareholder in Atari.

• The production team is based in New York City, with 3rd-party development

studios in the US and abroad.

• Products are primarily sold digitally, on a worldwide basis.
• The group uses 3rd parties to manufacture and distribute physical boxes.

January 2016

Atari SA

French-listed entity 100%-owned subsidiaries

Atari US Atari Europe

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Publishing Distribution Rights Prod / Dev

Old Value Chain

• Integration of key functions;

limited use of third party studios

• Great dependence on physical

distribution

• Limited level of ancillary

revenue (digital, licenses, merchandising,…)

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Atari is No Longer Operating Like This

January 2016

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Current Business Model

Atari is a content production company aiming at maximizing the value of its brands and IP portfolio in the interactive entertainment industry.

To Maximize Profits:

• Fixed costs are at the lowest

levels and the production management is externalized

• Co-investments are favored

with studios or third party

• Digital distribution is fully

implemented and deployed

Atari Capitalizes On:

• A huge IP portfolio
• Efficient production and
• perations
• Effective digital marketing

management

• An experienced Management

Team

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€ Team Executive Production External Studios Digital Distribution Others (Casino, ...) Licensing Box distribution IPs

The New Value Chain

• Intensification of

externalization

• Diversification
• f the

distribution channel and sources of income

• Digital

Distribution

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The New Atari

January 2016

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Strong Management Team

Fred Chesnais - Chief Executive Officer, Member of the Board of Directors Todd Shallbetter – Chief Operating Officer

• Key executive at Atari, managing multiple business lines including

digital distribution, rev share/royalty management; solid knowledge of Atari’s global business.

• Expertise in business development.
• Largest shareholder of Atari, Chairman of the Board and CEO.
• Deputy-COO and CFO of the Atari Group 2001-2004, CEO of Atari

Interactive until 2007.

• Brings recent experience with online MMOs.

Philippe Mularski – Chief Financial Officer

• Certified accountant and Auditor.
• Joined Atari Group in 2014.

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Broad, Diversified Platforms

Strong positioning enables worldwide operations with a small team

PC Download Online Casino Streaming Digital Console Advertising

January 2016

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3 – Summary Financials – Cap Table

January 2016

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2013-2015 Turnaround achieved

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Revenue: From 1,2 M€ to 7,6 M€ From a net loss

• f (35,8) M€ to a

net profit of 1,2 M€ Equity: From (34,9) M€ to (13,1) M€ From a net debt

• f (31,4) M€

to (11,0) M€

March 2013 to March 2015

(Year end as at March 31)

(€ million) 2012-2013 2013-2014 2014-2015 Revenue 1,2 3,3 7,6 Current operating income 0,6 0,9 0,2 Operating income (2,0) 1,3 1,5 Net income (loss) (35,8) (2,5) 1,2 Shareholders' equity (34,9) (31,3) (13,1) Net financial debt (31,4) (24,8) (11,0)

January 2016

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Full Year Consolidated Statements as of March 31, 2015

An increase of turnover (x)2 compared to the previous year Profitable Company Net revenue: 7,6 M€

• An increase of turnover (x2) compared to the

previous year

• More than 15 million downloads of RollerCoaster

Tycoon for mobile. Current operating income: + 0,2 M€

• R&D expenses: - 5,2 M€ including 2,8 M€ fixed;
• Marketing costs: - 0,9 M€
• Control of overhead costs

Operating income: +1,5 M€

• Restructuring costs: +0,4 M€
• Other non- recurring revenue: +1,0 M€

Net income: + 1,2 M€

• Cost of debt: - 1,4 M€
• Other financial income: +1,1 M€

(€ Million) 2014/2015 2013/2014 Net revenue 7,6 3,3 Gross Margin 6,3 3,2 % of the net revenue 83,8% 96,5% Current operating income 0,2 0,9 % of the net revenue 2,3% 27,7% Operating income 1,5 1,3 Profit (loss) from continuing operations 1,2

• 2,5

Net income (loss) 1,2

• 2,5

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Full Year Consolidated Statements as of March 31, 2015

Development costs are capitalized for 2,8 M€

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ASSETS (€ million) March 31 2015 March 31 2014 Intangible assets 2,8

• Property, plant and equipment
• Non-current financial assets

0,2 0,2 Non-current assets 3,0 0,2 Inventories

• Trade receivables

0,7 0,4 Current tax assets 0,6 0,2 Other current assets 0,9 1,4 Cash and cash equivalents 3,7 5,8 Current assets 5,9 7,8 Total Assets 8,9 8,0

January 2016

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Net cash position excluding Alden loan: +1,1 M€ as at March 31, 2015 (pending litigation Alden – cf annual report) Equity improved from -31,3 M€ in 2014 to -13,0 M€

January 2016

Equity & liabilities (€ million) March 31 2015 March 31 2014 Total equity

• 13,0
• 31,3

Non-current financial liabilities 1,8 30,5 Other non-current liabilities 0,1 0,6 Non-current liabilities 1,9 31,1 Provisions for current contingencies and 1,2 1,6 Current financial liabilities 12,8 0,0 Trade payables 4,6 4,4 Current tax liabilities 0,3 0,1 Other current liabilities 1,1 2,1 Current liabilities 19,9 8,2 Total equity and liabilities 8,9 8,0

Full Year Consolidated Statements as of March 31, 2015

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Key Figures as at September 30, 2015

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Revenue: from 3,5 M€ to 4,2 M€ Contribution to net income for subsequent periods:

• Casino + 1,2 M€,
• RCTW + 1,6 M€

Financial results in line with Group’s targets

Excluding from revenues:

• Signed casino licences: 1,8M€
• Pre-orders for RCT World:

more than 2,0 M€

January 2016

• Sept. 30, 2015
• Sept. 30, 2015 March 31,2015

(6 months) (6 months) (12 months) Revenue 4,2 3,5 7,6 Current operating income (0,4) (1,6) 0,2 Operating income (1,1) (1,6) 1,5 Net income (loss) (1,4) (2,3) 1,2 Shareholders' equity (13,6) (15,4) (13,1) Net cash (Net financial debt) excluding Alden loan (0,8) 2,8 1,1 Net cash (Net financial debt) (13,2) (9,2) (11,0) (€ million)

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A Very Significant Reduction of the Net Debt

Net debt significantly reduced

Net financial debt excluding Alden decreased from 13,3 M€ as at March, 2014 to 0,8 M€ as at March, 2015 Alden’s loan represents 12,4 M€ with:

• 10,6 M€ in principal
• and 1,8 M€ in interest

Pending litigation against Alden (cf. annual report)

24 January 2016

(€ million) March 31, 2014 March 31, 2015 Sept. 30, 2015 OCEANEs 2003-2020 (0,6) (0,6) (0,6) OCEANEs 2019 (18,4) OCEANEs 2020

• (1,2)

(1,2) Others (0,7) (0,8) Gross financial debt excluding Alden (19,0) (2,5) (2,6) Cash and cash equivalents 5,8 3,7 1,9 Net cash (Net financial debt) excluding Alden (13,3) 1,1 (0,8) Alden loan (11,5) (12,1) (12,4) Net cash (Net financial debt) (24,8) (11,0) (13,2)

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Deferred Income Taxes

The Group has incurred significant losses in the past, resulting in cumulative losses in excess of euro 745 million for Atari, SA, head of the tax consolidation in France. These losses would translate into potential tax savings in an amount of up to euro 245 million, subject to prevailing conditions that may be in effect at the time of use of these deficits. These tax savings represent circa euro 1.45 par share (calculated as at December 31, 2015 on the basis of the goal number of shares outstanding less treasury shares).

Tax loss carryforwards as at March 31, 2015 735 732 824 € Deferred income taxes as at March 31, 2015 245 244 275 € Outstanding shares as at March 31, 2015 183 185 874 Treasury shares as at March 31, 2015 14 615 535 Outstanding shares excluding treasury shares 168 570 339 Deferred income taxes per share 1,45 €

January 2016

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Cap Table Simplified

Double voting rights: 249 607 (no impact) 26

Potential dilution :

• Océanes 2020 : 3,4 million shares (€0,35 per océane)
• Stock options : 5,5 million shares (€0,20 per share)

January 2016 As at December 31, 2015 #Shares % Ownership Ker Ventures LLC 39 877 179 21,8% F Chesnais Alex Zyngier 12 013 615 6,6% Director Public 116 679 245 63,7% Auto-contrôle 14 615 535 8,0% TOTAL 183 185 574 100%

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4 – Key Investment Considerations

January 2016

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Key Investment Considerations

• Iconic brand, with a worldwide appeal across generations
• Sector with strong growth and multiple opportunities.

Much more than video games – significant trans-media opportunities:

• Hardware (console, drones,…)
• TV (scripted series, unscripted series)
• Web series
• Movies
• Comic books
• Merchandising
• Efficient business model:

No fixed cost / Build portfolio value

• Company in a turnaround phase,

with very significant investment risk and highly volatile stock price

• Non-operational assets

(tax savings of up to Euro 1.45 per share)

January 2016

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5 – Exhibits

January 2016

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A Robust IP Catalog

And Many More!

• Act of War Series
• Double Dunk
• Miniature Golf
• Solar War
• Airborne Rangers
• Drag Race
• Missile Command
• Solaris
• Asteroids Series
• Fatal Run
• Monte Carlo
• Space Duel
• Atari Greatest Hits
• Food Fight
• Night Driver
• Space Race
• Atari Soccer
• Football
• Ninja Golf
• Spike
• Atari Video Cube
• Frog Pond
• Orbit
• Spitfire
• Avalanche
• Frisky Tom
• Outlaw
• Star Raiders
• Basketbrawl
• Fun With Numbers
• Planet Smashers
• Star Ship
• Breakout
• Gravitar
• Pong
• Street Racer
• Canyon Bomber
• Hangman
• Radar Lock
• Submarine Commander
• Castles and Catapults
• Haunted House
• Red Baron
• Subs
• Centipede Series
• Human Cannonball
• Return to Haunted House • Sword of the Samurai
• Circus Atari
• Iron Soldier
• Roadrunner
• Swordquest Series
• Codebreaker
• Liberator
• Saboteur
• Tank
• Cops and Robbers
• LocoMania
• Sentinel
• Telepathy
• Countermeasure
• Lunar Battle
• Shooting Arcade
• Tempest
• Crystal Castles
• Lunar Lander
• Sky Diver
• Terra Force
• Dark Chambers
• Major Havoc
• Sky Raider
• Tubes
• Dodge ’em
• Millipede
• Slot Machine
• Ultra Wars
• Dominos (Atari)
• Mind Maze
• Slot Racers
• Yars’ Revenge

January 2016

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And Many More…

31 January 2016

3D Asteroids 3D Tic-Tac-Toe A Game of Concentration Act of War: Direct Action Act of War: High Treason Adventure Adventure II Agent X * Airborne Ranger Air-Sea Battle Akka Arrh Alien Brigade Alone In the Dark Alpha 1 Anti-Aircraft Aquaventure Asteroids Asteroids Deluxe Asteroids On-line - Atari GO version Asteroids: Gunner Asteroids: Gunner+ Atari 80 Classic Games in One! Atari Anniversary Advance Atari Anniversary Edition Atari Anthology Atari Arcade Hits: Volume 1 Atari Arcade Hits: Volume 2 Atari Baseball Atari Basketball Atari Casino Atari Classics: Evolved Atari Football Atari Greatest Hits Atari Greatest Hits: Volume 1 Atari Greatest Hits: Volume 2 Atari Mini Golf Atari Outlaw Atari Revival Atari Soccer Atari Video Cube Aquaventure Avalanche Backgammon Barroom Baseball Basic Programming Basketball Basketbrawl Bionic Breakthrough Black Belt Black Jack Black Widow Boogie Demo Booty, Bowling Boxing Brain Games Breakout Breakout Breakout Boost Canyon Bomber Casino Castles and Catapults Caverns of Mars Centipede Centipede: Infestation Centipede: Origins Championship Soccer Circus Atari Cloak & Dagger Cloud 9 Codebreaker Combat Cops 'N Robbers Countermeasure Crash 'N Score Crystal Castles Dark Chambers Demons to Diamonds Desert Falcon Destroyer Doctor Pong "aka Puppy Pong" Dodge ’Em Dominos Double Dunk Drag Race Fast Freddie Fatal Run Final Legacy Fire Truck Firefox Flag Capture Flyball Food Fight (Charley Chuck's) Football Frisky Tom Frog Pond Fun With Numbers Gerry the Germ Goes Body Poppin Goal 4 Golf Gotcha Gran Trak 10 Gran Trak 20 Gravitar Hangman Haunted House HiWay Holey Moley Home Run Human Cannonball Hunt & Score I, Robot Indy 4 Indy 500 Jet Fighter LeMans Liberator Lunar Battle Lunar Lander Major Havoc Maze Craze Meebzork Meltdown Micro-gammon Millipede Mind Maze Miniature Golf Minimum Missile Command Missile Command 2 Missile Command 3D Monstercise Monte Carlo Moto Psycho MotoRodeo Night Driver Ninja Golf Off the Wall Orbit Outlaw Peek-A-Boo Pin Pong Planet Smashers Pong Pong Doubles Pong Tournament Pong World Pong: The Next Level Pool Shark Pursuit Quadra Pong Quadrun Quantum Quiz Show Qwak! Radar Lock Realsports Baseball Realsports Basketball Realsports Boxing Realsports Football Realsports Soccer Realsports Tennis Realsports Volleyball Rebound Red Baron Retro Atari Classics Return to Haunted House Roadrunner RollerCoaster Tycoon Runaway Saboteur Save Mary Space War Space War 2000 Spike Spitfire Sprint Sprint 4 Sprint 8 Sprintmaster Star Raiders Star Raiders II Star Ship Steeplechase Steeplechase Stellar Track Stock Car Street Racer Stunt Cycle Submarine Commander Subs Super Asteroids & Missile Command Super Baseball Super Breakout Super Bunny Breakout Super Football Superbug Surround Swordquest: Earthworld Swordquest: Fireworld Swordquest: Waterworld Tank Tank II Tank III Telepathy Tempest Tempest 2000 Tempest: Menace of the Arcade Dwellers - Online version Test Drive Series Tournament Table Triple Hunt Tubes Typo Attack Ultra Tank Video Checkers Video Chess Video Olympics Video Pinball Warlords Wizard Wolf Pack Xari Arena Yar's Return Yar's Revenge Zulu

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RollerCoaster Tycoon Franchise

January 2016

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RollerCoaster Tycoon

The franchise popularity extends to Europe and has a strong presence in the UK and Germany, with more than 4.6 million units sold in Europe

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Popular management simulation franchise that allows players to construct the theme park of their wildest dreams The franchise has generated

• ver $220

million in North America sales Sales with over 14.4 million units sold worldwide License extends through 2019 RollerCoaster Tycoon 4 Mobile: 15 millions download since April 2014

January 2016

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Multi-revenue streams

Note: (1)includes total sales, add-ons, international sales and digital RCT licensed until 2019. Source: Vgchartz, Internet , proprietary data

Aggregate total sales: 14.6m Units 1

RollerCoaster Tycoon

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Next sequel: “Rollercoaster Tycoon World” - release scheduled for early 2016

1999 2002 2004 2014

Launch of mobile version

PC

Launched on PC Edited by ATARI

4.0m sold units

PC Edited by Infogrames

3.7m sold units

PC Edited by Hasbro Interactive

6.7m sold units

January 2016

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• Atari is leveraging a strong foundation for brand extensions and licensing,

including for film and television

Licensing

• Company has focused primarily on global trademarks for Atari brand and Atari

library of IP

• Pursuing partners for hardware and accessories - Plug and play gaming products

have generated sales of over $110 million, with over 7 million units sold

• Create exposure through integration with national and global brands

January 2016

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www.atari.com