The U.S. arm of video game maker Atari has filed for Chapter 11 bankruptcy protection, planning to separate from its unprofitable France-based parent company.
The corporate parent, formerly known as Infogrames, is called Atari SA.
"The Chapter 11 process constitutes the most strategic option for Atari's U.S. operations as they look to preserve their inherent value and unlock revenue potential unrealized while under the control of Atari SA," the company said. "During this period, the company expects to conduct its normal business operations."
Observers expect the U.S. arm to look for a potential buyer and focus on growth opportunities on digital platforms. Bloomberg News reported that the U.S. business, based in New York, also could seek independent funding.
Founded in 1972, Atari, best known for such classic early video games as Pong and Asteroids, has been financially strained. The French parent company hasn't made a profit since 1999, according to Bloomberg, despite asset sales and restructurings as the arcade game pioneer has struggled to keep up with bigger competitors.
Atari's stock was down more than 3 percent in early Paris trading.