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Jaguar's demise


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#1 asmat80 OFFLINE  

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Posted Wed May 29, 2013 9:07 PM

Ok, someone help me out. JTS storage bought out Atari in 1996. First said they would continue support then did the opposite. Sucked Atari's cash dry, filed for bankruptcy, and sold Atari to Hasbro. Why did the Tramiel's do that? Where they backstabbed by JTS?

#2 Ayreon OFFLINE  

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Posted Thu May 30, 2013 4:55 AM

Nah.. I think they were aware that JTS would never have any plans to support the Jag. JTS imo was never really a serious business. Their drives had bad reputation. Business was probably no good. I think the whole merger was to keep as much money as they could in the pocket of both parties. But i'm no financial specialist. It will probably be adressed in "Business is war"

#3 Goochman OFFLINE  

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Posted Thu May 30, 2013 5:43 AM

It basically was a way for the Tramiels to cash out before everything was spent.

#4 DanOliver OFFLINE  

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Posted Thu May 30, 2013 6:12 AM

I have no idea, but assume they thought it was a cheaper way to sell off assets and walk away with some money while keeping as much value in the brand as possible. If Atari calls a company and says "we want to sell everything" it's a fire sale. If JTS calls you and says "we merged with Atari to get ABC but we don't really want XYZ part" it's not as desperate sounding, better price.

I would bet Jack Tramiel had a good prior relationship with whoever was in charge at JTS. There weren't any lawsuits that I know of so everything probably went according to plan, there were no surprises.

I doubt JTS sucked Atari dry. More likely Jack Tramiel's plan. He was sharp, had very sharp lawyers and knew how to use them. I remember once the Atari Corp general counsel (I think) was in our office talking about a pending Commodore lawsuit and said it was a completely bogus suit with no merit...and he knew this because he's the one who filed it when he worked at Commodore. Don't know if what he said was true, but sounds about right.

I assume insiders on both sides took money out before the bankruptcy and that was the plan. That kind of thing would have to take place over time. You can't paid yourself a million dollar bonus on Monday and declare bankruptcy on Friday. Court is going to see thru that. Got to be done all nice and legal.

So there would be the surface story that you'd want everyone to believe and then what was said at dinner between Jack and someone at JTS. No doubt also perfectly legal, but maybe better left between friends.

I think Jack Tramiel's primary motivation to start the whole Atari Corp thing was to kick sand in the face of those who pushed him out of Commodore. To do that Atari Corp would have had to do really well, like Apple well. When it was clear that was never going to happen there was no point to continue. Get what cash you can out and call it a day.

He also wanted to work with his sons of course.

As far as promising support...you don't want trouble when doing something like a merger. A lawsuit can derail the whole mess. So you promise everything to everyone and the merger goes smooth. After the merger you can deal with any lawsuits and still do whatever you like.

It's kind of strange, we look at it as lying but as corporate officers they're pretty much bound by law to lie. It's their duty to stock holders and creditors to keep as much value as possible. Lying to customers isn't very risky.

#5 asmat80 OFFLINE  

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Posted Thu May 30, 2013 10:00 AM

So its typical corporate criminal behavior. It sucks for the people who worked for them and really believed in the products they were creating and selling. Just to find out one day you are no longer needed. Dan Oliver did you work with Atari in the past? During the Jaguar Years? I researched a little on the Tramiels' and knew that Jack was imprisoned by the Germans for being a Jew and eventually was freed by the US Army and made it over here where he made his fortune. Then got involved with Commodore and Atari.

#6 asmat80 OFFLINE  

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Posted Thu May 30, 2013 10:09 AM

Sorry He didn't get involved with Commodore, he created it! I'm not faulting them. It might have been the only way to get out now before losing there behinds type of deal. But I do know they should have had a better marketing team to promote the Jag better then they did back then. When they finally were trying, it was too late.

#7 DanOliver OFFLINE  

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Posted Thu May 30, 2013 5:12 PM

Yes I worked at Atari and Atari Corp and left 1/86. I did some debugging on Desert Falcon 7800 as a contractor later but don't remember the date.

Commodore was indeed all Jack's, which is why I think it was personal. Same deal as when Steve Jobs got pushed out of Apple and started Next to show Apple they were wrong. But this is all just my impression.

#8 doctorclu OFFLINE  

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Posted Thu May 30, 2013 8:33 PM

Let's face it, when you are handed a collection to take out what you want and sell off the rest right? I get handed a collection of Commodore stuff (as I did recently) I pull out all the software that had Atari on the other side, save some good joysticks, a good monitor, and I might try Elite, but aside from that, I look at the rest and go "What the frack is the rest of this stuff?"

I'm sure JTS did the same. Figure in the "lot" that was Atari they could pull out a few gems related to a hard drive company and liquidate the rest.

It's common.

#9 DarkLord OFFLINE  

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Posted Thu May 30, 2013 9:13 PM

Be interesting to see what the next Atari book tells about this segment of
their history. :)

#10 wood_jl OFFLINE  

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Posted Thu May 30, 2013 9:21 PM

Be interesting to see what the next Atari book tells about this segment of
their history. :)


I concur. I'd also like to know - definitively - what happend SINCE then, but "they're not interested" in covering that era. Perhaps [the entitly formerly known as] Atari bankruptcy will change that, as legal threats are fewer from bankrupt organizations.

#11 asmat80 OFFLINE  

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Posted Thu May 30, 2013 9:37 PM

Yeah, I'm curious as who exactly is this JTS Storage? Besides the already know. I mean did Atari/ JTS take a big loss selling all of Atari's inventory?

#12 DanOliver OFFLINE  

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Posted Thu May 30, 2013 11:13 PM

I don't think JTS paid anything for Atari Corp. They just merged on paper with agreements like the Tramiels being able to sell Atari assets as compensation. Just a cheaper way to wind down two companies. Maybe JTS losses were used to offset Atari income to not pay taxes. Tax code is written by corporations so they can do stuff like this.

I look forward to the book too. Tramiels were pretty interesting. I never had a clue what they were thinking or trying to do.

#13 asmat80 OFFLINE  

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Posted Thu May 30, 2013 11:51 PM

Has anybody asked the surviving son Sam? Didn't he run the whole Jaguar era mainly by himself?

#14 Pete5125 OFFLINE  

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Posted Sun Aug 11, 2013 11:54 AM

Yep, his health declined, so his Pop, came back, kept Atari Running long enough to make it through one last Christmas (they had actually got Wal-Mart to start selling the system, More popular games and licensed games where being released), plus the lawsuit was getting ready to be settled out of court by Sega, where Sega was forced to by a percentage of Atari stocks and make available 6 (non-Sonic, non-new release )games per year and Atari in turn could make 6 for Sega.


The Wal-Mart thing fell apart and their was no way to make it work, they where wasting away through the cash flow of the Sega lawsuit, and he knew Atari would never be in the position of even a 3rd place, the writing was on the wall, and with the merger they could quietly stop production on the games in production, and liquidate everything else, if games where close to completion they would be completed enough to be half way playable and released during that finale season.

JTL was a disk drive company, and the Atari Name and titles did hold some value so that is how HASBRO ended up with, them, then Midway, and so-on

It is a surprise that Atari as a name does hold some value, we sold some Flashback Counsels at work last year and they did very good sold out, no markdown..

#15 tripled79 OFFLINE  

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Posted Sun Aug 11, 2013 6:21 PM

I boguht my first Jaguar just as Atari was being merged with JTS. I remember being very intrigued, but kinda sad about all the potential the Jag had...

#16 asmat80 OFFLINE  

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Posted Sun Aug 11, 2013 6:30 PM

Yeah both the lynx and the jaguar had lots of potential. Both were better products then there counterparts at the time but not better when it came to software development. Thats not all Atari's fault though. You still see it today. Companies want to port games across platforms because its cheap. I truly believe had the Jag come out in 1992 for Christmas it would have given it that little extra time to do better. They could have had some type of cross play with lynx too. The jaguar did have the games streaming out by 1995 - 1996 but its was already too late.

#17 Pete5125 OFFLINE  

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Posted Sun Aug 18, 2013 6:51 PM

Well yes Atari did make a better system than the competition, but Atari also helped dig their own grave on software support, half the game released where non-finished versions so that they could get around paying for the final product, Atari did not do a very good job of communicating all the tricks for making the games faster and better, and they spent very little on R&D, they released a CD add-on that they knew would never have more than 10 games made for it, and did little to help out the companies involved in trying to support Jag, and this wasn't a new thing they had created so much bad will in the past that most where very surprised that they where able to claim over 100 developers for the JAG

#18 Austin ONLINE  

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Posted Fri Aug 23, 2013 9:43 PM

Maybe their product was better than (some) of the competition in '93, but by '95? That's just being unrealistic.

That's aside what I wanted to say. "Support" could have been termed to be used very loosely. Technically JTS *did* continue to support the platform, but not in the way we would have liked (i.e., new games, ads, etc). After the merger they did still have the Atari tech support line running. I remember getting support on my Jag CD from them well after the merger.

#19 Willard OFFLINE  

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Posted Sat Aug 24, 2013 12:39 PM

I truly believe had the Jag come out in 1992 for Christmas it would have given it that little extra time to do better. The jaguar did have the games streaming out by 1995 - 1996 but its was already too late.

 

i think the jaguar would've struggled even worse had it been released earlier. i suspect that a factor that played a big hand in the flux of games late in the jaguar's life was probably the $90 million atari got from a lawsuit settlement with sega in September of 1994. the jaguar already got hammered by critics for having only like 7 games out through the end of '94 (1 year of the jaguars life), imagine if it had only been 7 games in the first 2 years.



#20 Willard OFFLINE  

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Posted Sat Aug 24, 2013 12:43 PM

That's aside what I wanted to say. "Support" could have been termed to be used very loosely. Technically JTS *did* continue to support the platform, but not in the way we would have liked (i.e., new games, ads, etc). After the merger they did still have the Atari tech support line running. I remember getting support on my Jag CD from them well after the merger.

 

they still prbly honored warranties and woudl've been happy to continue taking 3rd party publishers money for compliance and licensing fees had there been any suckers still interested in releasing games :P



#21 CRV OFFLINE  

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Posted Sat Aug 24, 2013 4:04 PM

I would recommend people listen to the Atari: Beginning to End panel from CGE 2K4. John Skruch and Bill Rehbock talk about the end period.

 

To summarize, Sam's heart attack was the catalyst for everything that happened after that. Before that, Jaguar 2 was in the works. Mortal Kombat 3 was in the works. There was money from the Sega settlement and other lawsuits. They started a PC division. They were talking to Bernie Stolar about being a PlayStation licensee. For Jack, getting with JTS was putting Atari in "a safe place" since disk drives are a "brown box commodity" with little marketing required.



#22 asmat80 OFFLINE  

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Posted Sat Aug 24, 2013 8:58 PM

I would recommend people listen to the Atari: Beginning to End panel from CGE 2K4. John Skruch and Bill Rehbock talk about the end period.

 

To summarize, Sam's heart attack was the catalyst for everything that happened after that. Before that, Jaguar 2 was in the works. Mortal Kombat 3 was in the works. There was money from the Sega settlement and other lawsuits. They started a PC division. They were talking to Bernie Stolar about being a PlayStation licensee. For Jack, getting with JTS was putting Atari in "a safe place" since disk drives are a "brown box commodity" with little marketing required.

Thanks, this is a good reference.



#23 asmat80 OFFLINE  

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Posted Sat Aug 24, 2013 9:00 PM

In 95 you had SNES, 32x, Saturn, Playstation, 3DO, Turbografix cd. I said that in the begining atari had the best hardware being 1993. But dont you think that they could have hardware wise gone neck to neck had they had proper development? I think so.

 

i think the jaguar would've struggled even worse had it been released earlier. i suspect that a factor that played a big hand in the flux of games late in the jaguar's life was probably the $90 million atari got from a lawsuit settlement with sega in September of 1994. the jaguar already got hammered by critics for having only like 7 games out through the end of '94 (1 year of the jaguars life), imagine if it had only been 7 games in the first 2 years.



#24 asmat80 OFFLINE  

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Posted Sat Aug 24, 2013 9:02 PM

But think about it, Xmas 1992, SNES was already a year old. Genesis was 3 years old, Turbografix about 2. People would have had some money to throw at it being the only new console for that season.

 

i think the jaguar would've struggled even worse had it been released earlier. i suspect that a factor that played a big hand in the flux of games late in the jaguar's life was probably the $90 million atari got from a lawsuit settlement with sega in September of 1994. the jaguar already got hammered by critics for having only like 7 games out through the end of '94 (1 year of the jaguars life), imagine if it had only been 7 games in the first 2 years.



#25 Retro Rogue OFFLINE  

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Posted Sat Aug 24, 2013 9:51 PM

i think the jaguar would've struggled even worse had it been released earlier. i suspect that a factor that played a big hand in the flux of games late in the jaguar's life was probably the $90 million atari got from a lawsuit settlement with sega in September of 1994.


Yes, that was a big part of the reverse merger. When Sam had the heart attack and Jack came back to run things, with how bad things were (they had maybe two years left at best) it made more fiscal sense to him at the time to have that money invested elsewhere and the JTS reverse merger was conducted as Pete mentioned. It was a reverse merger, not just a merger though. JTS and Atari Corp. combined under a JTS banner, with Jack and company joining the management and Atari Corp. existing as a division within the new corporation. That division was eventually whittled down to just John Skrutch at a desk until JTS burned through all the money and began selling things off - starting with the Atari name and IP.






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