Atari to stop publishing and focus on developing?

Oh dear - Atari isn't doing very well lately. The company which used to be at the forefront of gaming posted it's second quarter results a few days ago, revealing sales which had fallen by $13.3 Million to a net loss of $7.7 Million. Publishing revenue was down too, falling from $23.1 Million to $11.4 Million. Distribution revenue fell from $5.5 Million to $1.9 Million.

It's now been suggested by analysts like Michael Pachter of Webush Morgan that the company should undertake drastic measures in order to survive - namely ceasing all game publishing and cutting staff by up to 50 percent.

"It is likely," he said to Gamasutra, "that the company will cease its publishing operations altogether and become a pure distribution business. However, in order to profitably do so, we believe that it must cut its staffing levels by over 50%."

Pachter reckons that the CEO of the Atari will resign also, which seems like a safe bet, and that significant management changes will occur so that the company can get through the next financial year.

Oh, how the mighty have fallen.

Atari has been in trouble for a fairly long time now, but it looks like the company may not be able to take much more. Do you have an idea on how to save the gaming giant or should someone just take the ol' horse out to pasture? Let us know what you think in the forums.