Atari has announced that it has acquired US-based MMO developer Cryptic Studios in a performance-linked deal.

The company, previously responsible for City of Heroes and City of Villains, which made over USD 100 million for NCsoft, is in production on three titles, to be released over the next three years.

Champions Online is slated for a 2009 launch, while a Star Trek MMO will follow in 2010 and an as-yet-unannounced game will be released in 2011.

Additionally the deal will see some of the studio's technology make its way into other Atari titles, as well as powering the Atari.com portal.

"The acquisition of Cryptic Studios brings to Infogrames an outstanding creative organisation, with a proven track-record of success in the fast-growing MMO category," said David Gardner, CEO of Infogrames/Atari in a statement. "Cryptic's success is founded on leading-edge technology and the vision of a seasoned executive management team.

"I am impressed with the tools and technology that Cryptic has developed to make MMOs less expensive to build. Creating vast worlds and interesting interactions can be very people intensive but with the use of Cryptic's toolset they have a proven way of cutting average production costs in half. This is exactly the type of company we wanted to acquire in order to build Atari for the 21st century.

And John Needham, CEO of Cryptic and former Sony exec, added: "We share a common vision with Atari and their leadership team. With our game development and online platform technology skills, we're very excited about the opportunities that this unique combination with Atari creates. I am committed to helping Atari grow into a leading online game company and look forward to being part of the team."

The deal itself comprises of an initial USD 26.7 million upfront cash payment, with an estimated maximum earn-out of around USD 27.5 million to be made up of cash and Infogrames shares.

Additionally the performance-related bonus could see as much as USD 20 million paid in cash or stock if Champions Online and Star Trek's 2010-11 revenues outperform set undisclosed targets, payable in August 2010 and May 2011.

Edit: December 09th at 9.30pm GMT - This Update has now been posted on the Cryptic Studios and Star Trek Online Website:

INFOGRAMES TO ACQUIRE CRYPTIC STUDIOS, A LEADING MMO GAMES DEVELOPER, PUBLISHER AND OPERATOR

Acquisition Will Provide State-of-the-Art Games and Technology Expected to Boost Atari’s Online Business Growth -

LYON, FRANCE – 9 December 2008 – Infogrames Entertainment, the parent company of Atari, today announced that it has entered into a definitive agreement to fully acquire Cryptic Studios Inc., one of the world’s leading developers, publishers and operators of Massively Multiplayer Online (MMO) games.

The transaction encompasses all of Cryptic’s proprietary IP, tools, technology and work-in-progress and integrates all members of the leadership team and employees into Infogrames. This acquisition is a critical step in the implementation of Atari’s strategy to become a leading online game developer and publisher.

Cryptic is currently developing three unique MMO franchises, planned for release over the next three years on PC and next-generation consoles, including Champions Online to be released in 2009 and Star Trek Online to be released in 2010. A third game currently in development will be announced in the near future.

Established in 2000 and headquartered in Los Gatos, California, USA, Cryptic has a proven track record of delivering successful MMO franchises (City of Heroes and City of Villains sold to NCSoft) generating over USD 100 million in lifetime revenues and up to 180,000 peak subscribers.

Cryptic is led by a highly experienced management team who shares Atari’s vision in online gaming and who has committed to stay with the group. Cryptic employs approximately 150 professionals, comprising leading industry creative, technical and operation experts with a proven track record in delivering on-time, on-budget titles. Cryptic’s revenues for the fiscal year ending June 30, 2008 amounted to USD 17 million.

Atari will benefit from Cryptic’s powerful proprietary engine, scalable content development tools and online server architecture to deliver very high productivity-per-employee and industry-leading client/server performance and create unique, high quality MMO games on 18 to 24-month cycles. Atari will also gain a proven set of high-quality MMO game operating tools for sophisticated customer service and account management.

David Gardner, CEO of Infogrames, the parent company of Atari, said: “The acquisition of Cryptic Studios brings to Infogrames an outstanding creative organisation, with a proven track-record of success in the fast-growing MMO category. Cryptic’s success is founded on leading-edge technology and the vision of a seasoned executive management team. I am impressed with the tools and technology that Cryptic has developed to make MMOs less expensive to build. Creating vast worlds and interesting interactions can be very people intensive but with the use of Cryptic's toolset they have a proven way of cutting average production costs in half. This is exactly the type of company we wanted to acquire in order to build Atari for the 21st century.”

“We share a common vision with Atari and their leadership team.” said John Needham, Chief Executive Officer of Cryptic Studios, “With our game development and online platform technology skills, we’re very excited about the opportunities that this unique combination with Atari creates. I am committed to helping Atari grow into a leading online game company and look forward to being part of the team.”

About Cryptic Studios
Cryptic Studios, Inc., based in Los Gatos, CA, and established in July 2000, is one of the leading independent developers of massively multiplayer online games. Cryptic is developing three major titles for the PC and current generation consoles, including Star Trek Online, Champions Online and an unannounced project. For more information on Cryptic Studios, please visit http://crypticstudios.com/.

About Infogrames Entertainment and Atari
The Infogrames group, including the Atari brand, is a global producer, publisher and distributor of interactive entertainment software for all market segments and all interactive game platforms including consoles from Microsoft, Nintendo and Sony Computer Entertainment, advanced smartphones, Personal Computers, web and online. Its games are sold in more than 60 countries through an international distribution network and direct to consumers via http://www.atari.com/.

Atari’s extensive catalogue of popular games is based on original franchises (Alone in the Dark, Test Drive, V-Rally, My Horse & Me, Backyard Sports franchise, Total Annihilation, Outcast etc.), publishing properties (The Witcher, Legendary, Race Pro etc.), international licenses (Dragon Ball Z, Dungeons & Dragons, Jamie Oliver etc.) and classic games covering the entire history of the video game industry (Pong, Missile Command, Asteroids etc).

© 2008 Atari Europe SASU. All rights reserved.

Champions, Champions Online, and Cryptic Studios are trademarks of Cryptic Studios, Inc. STAR TREK and related marks are trademarks or registered trademarks of CBS Studios Inc and used with permission.

----------------Update:
from AWEN on STO.com:

Hi there! I hadn't planned to introduce myself like this, but when in Rome... I'm Nicole or Awen whichever you choose to use. I am the lead community representative for Star Trek Online. (Just started last week so unfortunately I haven't had a lot of time to get to know all of you yet.) I'd like to answer some of the questions that you may have right now about this announcement.

The first thing that you should know is that it will be business as usual for Cryptic Studios. We still haven't announced a release date for STO and most likely will not do so for awhile. We like to keep the mystery building.

Basically, this acquisition allows Cryptic to really focus on making these games even better. Our goals are so closely aligned with those of Atari's new direction, that it accelerates our plans to independantly develop and operate really great games.

Overall, you probably won't see alot of changes, but I want to assure you that we're moving on the same track that we were yesterday and things are good.

I see a recurring theme here.  The game has not been pushed back. We are still aiming for a Fall 2009 release. I hope that this quiets your fears.

I want to let you know that this acquisition doesn't affect the design or timeline for Star Trek Online. It just means that we have the resources we need to get a good game out the door.

As a gamer, I understand the initial panic that alot of you may be feeling. I've felt it myself a few times in the past, believe me. However, I can assure you that we are heading toward the same goal that we were yesterday in terms of Star Trek Online. Things are continuing completely as they were. It's a good design and a great team. Everything is on course.

From KESTREL:

Make no mistake, STO is NOT being put on the back burner!

We're getting the full resources we need to make the best game possible. I see this as a big positive for Cryptic and STO.

  "woot"  --Kinn

EDIT: Dec 11, 2008

FROM ZINC

(( from STO.com: http://forums.startrekonline.com/showthread.php?t=12156&page=19 ))
You have nothing to fear.

This is an awesome deal for Cryptic, for Atari - and most importantly - for you guys. This guarantees that Star Trek Online will see the light of day and you guys will get to experience it!

I think LordYaro summed up a lot of the arguments around why this is good for the game. Nobody spends millions of dollars on a game company to shut them and their products down. : ) You acquire them if you think they're experienced, have a good plan and are on track to deliver awesome games. Then, afterwards - why would mess with that?

(Oh yeah - you also don't _sell_ your game company if the buyer isn't going to let you make your games!)

This is great news for STO - the dev team is very excited about this - now we can focus 100% on making game.

-Zn

 

 :Constitution: Yea, this game has taken way to long to get out! I was willing to wait just a little longer for a good game. With Atari, no thanks! 2010 is toooooooo long to wait for it and probably won't come out anyway, so might as well do something else now. Back to WOW I guess.

I'm not sure if I'm ready to throw in the towel on STO just yet.  This infusion of cash, plus the weight of a industry biggie like Atari might just be the push Cryptic needs to help it establish the game in the market moreso than with just 2K Games as publisher.  Atari is no Blizzard, but has a very long reputation in the vid-game industry, both good and bad, but has managed to stay in the minds of all of since the first console up to today and might just give them (Cryptic) the market cred needed to bring many to the table and try STO out.

I don't think that Atari will do to STO what many have said Sony has done to everything it touches, and they (Cryptic) might just be able to grow the dev staff large enough and put enough resources into the game that they might be able to get it back onto the Autumn '09 release date, although if I was Cryptic, I might take a fancy to moving the release date to closer to the end of '09 if not well into '10 to give them enough time to let Champions get established before releasing STO, as well as a much longer development cycle to get things close to right.

I want STO to live long and prosper (sorry, couldn't help myself... :D ) and if that means pushing the release into '10 then so be it.  It will give the development team more time to make the game uber terrific and give us all of the features, or at least the ones that will be the most attractive to us and allow Cryptic to deliver a superior space MMO game to the market.

I'm sure all the announcements about this will say how great it will be for both of these companies.  I don't think I would call this good news, but it remains to be seen if it will be bad or not.  As for the release date, I was figuring 2010 all along, so that doesn't change much of anything really.  I would think 2009 was a bit ambitious on the part of Cryptic, but not impossible.  I think we'd get a better game in 2010.  With these events who knows what impact, if any, it will have on a release date.

Oh, I wouldn't put to much stock in any release date they mentioned previously anyway, it was a bit too early to make any accurate estimate.  Besides, developers are notoriously optimistic about such dates.  You're better off looking for other signs that are much better indicators of how they are doing and which are much more reliable for estimating release dates.  Start by monitoring Champions Online for example.   :)   That being said, Star Trek Online will be released when it is released and fretting over exactly when it will be released is not . . . logical.  I can wait for the official announcement; I'm more concerned over the type of game play it will have at release.

The expected release date adjustments aside, I'm curious about their reasons for selling of course, but that isn't exactly the sort of information they may not disclose.  I'm sure they'll tell us something of course, but who knows how much we'll ever really know.  We may never know the whole story, not that it matters.

The important questions I expect them to address up front.  I expect we'll be reassured this wont have any impact on the development of Star Trek Online and the folks at Cryptic still have everything under control.  This shouldn't be cause for alarm, everything will be perfectly fine.  At least for now.  So, will there be any benefit at all to Star Trek Online from this?

heh, the story of the development of Star Trek Online goes on!  So any bets on whether or not Star Trek Online makes it to release before the game is sold off to yet another company?   :p   Don't laugh, in these economic conditions anything is possible over the next two years!  I could see Atari selling off the rights to Star Trek to raise some cash if they need it.  Not that they would mind you, but what are their intentions for the various games Cryptic is developing?  Just keep in mind that what they intend doing today may not be what they are forced to do tomorrow.

I guess that begs the next question, how are these two companies doing financially, or is this something we can determine with any reliability?  I suppose time will tell all!  Wont this be exciting?   =)

Though I know I haven't been here as of late, I still get the updates.

And of those two items; 2010 and Atari.
Hummm, well 2010 does not surprise me, as 2009 was really too soon for a MMORPG.

As with Atari...  I think it is bad news in terms of a development studio with a publisher.  Though not as cold as EA, I think Atari will cause an end to Cryptic as it exists today (talent, methodology and creativity).  STO will get some changes applied to it by Atari.  For better or for worse I don't know.  Somehow, I just don't see that third title getting released by Cryptic.