In a thrilling development for the gaming world, Atari, one of the most iconic consumer brands and interactive entertainment producers, is delighted to announce its agreement to acquire Digital Eclipse Entertainment Partners Co, a game development studio with a rich legacy in restoring classic video games. Digital Eclipse, founded in 1992 and based in Emeryville, California, is renowned for its commitment to preserving gaming’s heritage.

This acquisition is a significant step for Atari, as it expands its in-house development capabilities and gains access to Digital Eclipse’s industry-leading experience and proprietary technology. In becoming a part of Atari, Digital Eclipse is poised for growth, strengthening its development capacity and benefiting from access to world-class intellectual property. Together, they are set to enhance Atari’s retro-focused growth strategy, building on their recent acquisition of Nightdive Studios in May 2023.

Digital Eclipse, established nearly three decades ago, is a game development studio with a unique mission: safeguarding the history of gaming and sharing it through archival releases and interactive documentaries. They were pioneers in commercial video game emulation long before it became mainstream, making them leaders in the realm of retro-focused development.

Some of Digital Eclipse’s recent standout projects include titles like Street Fighter: 30th Anniversary, Mega Man Legacy Collection, SNK 40th Anniversary Collection, Teenage Mutant Ninja Turtles: The Cowabunga Collection, and Disney Classic Games Collection. These games not only sold millions of units but also earned critical acclaim. Notably, Digital Eclipse developed the celebrated Atari 50: The Anniversary Collection, heralded as the “new gold standard” for game compilations and one of the highest-rated titles of 2022.

Having produced over 250 games and fostered enduring relationships with key industry partners, Digital Eclipse has established itself as a leader in retro-focused game development. Their proprietary technology sets the standard for sales, critical reception, and innovation.

Wade Rosen, Chairman and CEO of Atari, expressed his enthusiasm for this collaboration: “Digital Eclipse is the best in the world at what they do. 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.”

The acquisition deal for Digital Eclipse is valued at $6.5 million, with an initial payment of $4.0 million in cash and $2.5 million in newly issued Atari ordinary shares. An additional earn-out of up to $13.5 million, based on Digital Eclipse’s future performance, will be paid in cash over the next ten years.

The completion of this acquisition is expected in the coming days. In addition to the cash consideration, Atari will also acquire a portion of Digital Eclipse’s shares directly, with a corresponding value of $2.5 million (€2.4 million) to be set off against the issuance of newly issued Atari SA shares. This capital increase will result in the issuance of 20,165,794 new Atari shares, with Digital Eclipse shareholders holding 4.6% of Atari’s share capital upon completion.

It’s worth noting that the majority of Digital Eclipse shareholders, accounting for approximately 95% of the capital, have agreed to a one-year lock-up on their Atari shares after the acquisition’s closing. This collaboration promises exciting new projects and a bright future for both Atari and Digital Eclipse.