ATARI

Atari cites Jaguar problems

By ?

From Television Digest, Dec 13, 1993 v33 n50 p16(1)

Blaming "certain startup production and supply problems," Atari last week said it would ship only about 20,000 Jaguar videogame systems in current quarter ending Dec. 31. As recently as middle of last month, when system was launched, Atari said it would ship 40,000-50,000 machines for system launch in London, N.Y., Paris, San Francisco.

Retailers in N.Y. and San Francisco report demand for system has been high, driven by heavy TV campaign, but availability on store shelves has been uneven at best. Company spokesman said major "problem" was discovery of inadequate shielding on cable connecting control deck to TV set, causing electrical interference on screen. Trouble was found on 28 units, caused halt in production, limiting shipments.

Delay could be especially damaging to Atari, which was attempting to use successful launch in N.Y. and San Francisco to show developers and retailers in rest of country that it once again could be major player in videogame market. Atari Pres. Sam Tramiel said he continued "to believe that we will ship approximately 500,000 Jaguar systems during 1994, subject to market acceptance of the product, availability of key components and the transition to volume production."

Announcement of Jaguar shortfall was tucked into bottom of news release announcing Atari 3rd-quarter earnings, which showed sales plunged 87% to $4.4 million, with net loss of $17.6 million (see financial table). Company conceded loss was "substantially larger than expected," blaming it on $7.5-million writeoff on finished goods inventory of older computers and videogame systems, $6.4 million in restructuring costs on Australian operations, lower value of certain European real estate.