A major development in fiscal 2007-2008 was the securing by the Company of additional financial resources. It believes that its balance sheet is now adequately structured to enable it to embark on a new growth phase.

In a changing video-game market that is expected to expand, the Group currently has many advantages, including:

• a global presence with a leading distribution network in Europe that has enabled it to hold on to a large market share by offering quality products adapted to local demand;
• substantial intellectual property (brands) and franchise holdings with considerable potential that provide it with a product line encompassing all of the formats and categories sold to the public and with a catalog of games combining best-selling established franchises with innovating concepts.
• the world-renowned “Atari” trademark

The relaunch strategy is based on three concepts that all play an instrumental role in the future development of the business:

1. Improved profits from Distribution,

2. A new impetus for Publishing, with online games a priority,

3. Continued optimization of operations.

1. IMPROVED DISTRIBUTION

The Group plans to improve the distribution of its products by relying on its global presence and international network, as well as by developing new forms of distribution through the Internet.

Distribution will be improved in four areas:

• “ATARI GROUP PRODUCTS": by increasing the share of the Group's own products in total distribution and promoting its franchises worldwide, relying on its expertise in the field;
• “ATARI GLOBAL PARTNERSHIPS": by strengthening international partnerships and agreements (Bandaï / Namco, etc.);
• “ATARI LOCAL PARTNERSHIPS": by continuing to make the international distribution network available to other market participants (third-party publishers);
• By optimizing the distribution structure, in terms of management and operations, in order to ensure that it generates income consistent with industry standards.

2. RELAUNCH OF PUBLISHING

In the Publishing area, the Group aims to modify its structure and to centralize the management of its franchise and intellectual property holdings. It will first focus on the largest market segments (consoles, PC, digital distribution and online business models), making full use of its resources. Giving new impetus to the publishing business will involve three complementary projects:

• “ATARI INSIDE": a gradual relaunch plan for the Group's historic franchises (Alone In the Dark, Neverwinter Nights, Test Drive, VRally, Baldur's Gate, Total Annihilation, etc.) and the enhancement of other intellectual property holdings with significant potential; in the course of the ordinary operation of its publishing business, the Group may also optimize its holdings by disposing of or acquiring intellectual properties.
• “ATARI OPEN TO THE WORLD": developing relationships with gaming communities, relying on independently designed product lines that provide opportunities for the creation of new original franchises. Under this strategy, in addition to its own products, Atari will work with many third-party development studios around the world, with all projects managed by its own production teams. In this connection, in-house production expertise may be optimized by the setting up of project management procedures and the addition of new talents.
• “ATARI OUT OF THE BOX": creation of new gaming experiences and positioning the Group on the basis of new business models, by developing online features for all key franchises, in-game advertising and business-to-business services (licensing out, exploitation of the Atari name, spin-offs, etc.). The development of online functionalities will require a reevaluation of in-house resources in order to identify areas that need to be strengthened or opened up.

3. CONTINUED OPTIMIZATION OF OPERATIONS

The improvement of distribution and relaunch of publishing will require a more centralized and rational operating policy in order to adapt to increased sales without incurring higher fixed costs, by:

• streamlining the decision-making process to improve productivity and responsiveness;
• structuring operations on a more global basis to improve operating ratios in connection with anticipated growth;
• giving more attention to the management of research and development budgets so as to improve return on investment.