Atari and three affiliates filed for Chapter 11 to reorganize and to break away from its French parent company, Atari S.A., the Los Angeles Times reported Monday.
Atari is the company that developed "Pong" and "Asteroids," which were simple digital games that proved three decades ago that the size of the gaming industry could be enormous.
Atari's U.S. operations has only 40 employees now and has not been profitable in about 10 years. About 17 percent of the company's profits come from licensing its name to other consumer products.
In 2008, Atari's assets were bought outright by a French company, which was formerly called Infogrames and is now named Atari S.A.
The French firm has also been losing money for about 10 years. Its fortunes have picked up in the past two years and would be profitable if it were not for another subsidiary that is losing money, Eden Games, analysts say.
A reorganized Atari may develop games for phones and recycle some of its historic moneymakers, including "Pong," and a compilation of its "greatest hits," the Times said.