Atari, a company that has been struggling for several years, has announced that it will be withdrawing from the production business to focus primarily on publishing and distribution in North America. In addition, the company has announced that it has licensed its Test Drive franchise to Infogrames Entertainment.

"Atari has determined to focus its resources on the publishing and distribution segments of the rapidly growing video game business. The Company's operations will involve title acquisition, sales and marketing, and physical distribution of products from IESA, its 51% shareholder, and other selected partners.

In line with that goal, Atari has agreed in principle with IESA to terminate its Production Services Agreement in the near future. As a result, Atari will no longer provide production and quality assurances services to IESA. Rather, Atari plans to transfer certain employees and contract other staff on a project basis for a limited period of time.

As part of the company restructuring, Atari, Inc. will reduce its current workforce in order to re-align the Company's cost structure with its on-going business base."