Atari acquires retro specialists Digital Eclipse in deal worth up to $20 million

Atari has announced it has reached an agreement to buy Digital Eclipse, a studio based in Emeryville, California that specialises in "digital restoration of classic games." The move follows Atari's acquisition of Nightdive Studios in May this year, another studio with a retro focus that most recently developed the System Shock remake, and is all part of what the press release calls Atari's "retro-focused growth strategy."

Well it makes a lot more sense than Atari hotels, at least. Digital Eclipse was a pioneer in commercial videogame emulation and recent projects from the studio include Street Fighter: 30th Anniversary, Mega Man Legacy Collection, SNK 40th Anniversary Collection, Teenage Mutant Ninja Turtles: The Cowabunga Collection, and Disney Classic Games Collection, which collectively "sold millions of units". Its most recent projects include the excellent Atari 50: The Anniversary Collection, the well-received The Making of Karateka, and the remake of Wizardry: Proving Grounds of the Mad Overlord, which is currently in Early Access.

"Digital Eclipse is the best in the world at what they do," said Wade Rosen, chairman and CEO of Atari. "They have a deep love and respect for the history of the games industry, and are renowned for developing critically acclaimed projects based on historic franchises. Digital Eclipse, along with Nightdive, are in perfect alignment with Atari’s DNA and renewed purpose."

Mike Mika, president and creative director of Digital Eclipse, said, "Our experience collaborating on Atari 50: The Anniversary Celebration was revelatory. The trust that Atari showed our team, and our clear mutual love and respect for the content, positioned us to produce something truly remarkable. I know Atari will continue to champion our approach and that we will be bringing fans exciting new projects for years to come."

The deal is for an initial $4 million in cash and $2.5 million in Atari stock up front, as well as a remaining "earn-out" of $13.5 million in cash over the next ten years based on performance. The acquisition is expected to close within days.

Atari under Rosen's leadership has been looking increasingly impressive. There have been some missteps along the way like the hotels and NFTs, and the company still has a division dedicated to blockchain stuff, but in recent years it's doubled-down on what Atari can be very good at: keeping gaming history alive, and re-packaging and re-mastering classic games in a manner that can appeal to contemporary audiences.

Atari also recently acquired the AtariAge archive (as well as announcing a new 2600 that takes cartridges) ands the rights to hundreds of games from the 80s and 90s. Both Digital Eclipse and Nightdive Studios are best-in-class at what they do, so it will be fascinating to see where those studios, and Atari itself, focus next.