ATARI SETS TERMS OF $200 MILLION RECAPITALIZATION AND PRICES STOCK OFFERING

-- All Long-Term Debt Eliminated --
-- Net Proceeds of $35 Million --

New York, New York, September 18, 2003 -- Atari, Inc. (Nasdaq: ATAR) announced that it has set the terms of its $200 million recapitalization through the issuance of new shares priced at $4.25 under an agreement with its majority shareholder, Infogrames Entertainment, SA (IESA) and a previously announced public offering. Per this agreement, Atari will issue 39.03 million shares of its common stock, valued at $4.25 per share, to IESA, in satisfaction of $165.88 million net balance of Atari's indebtedness to IESA, of which IESA is selling 17.18 million shares at $4.25 per share in the public offering. Atari also is selling 9.82 million new shares of its common stock in the public offering at $4.25 per share, generating net proceeds of $35 million. UBS Securities LLC is acting as sole bookrunner, and Harris Nesbitt Gerard, Inc. and SoundView Technology Group are acting as co-managers.

Upon completion of the public offering and these recapitalization transactions, Atari will have eliminated all of its long-term debt, and IESA's ownership stake in Atari will be reduced to 71% from approximately 88%. IESA has granted the underwriters an option to purchase 4.05 million shares to cover over-allotments at the same price of $4.25 per share.

Bruno Bonnell, Chairman and CEO of Atari, Inc. said, "The response to this offering marks the beginning of a new chapter for Atari. After having restructured our operations and having doubled our U.S. market share in the past two years, we now emerge with a stronger balance sheet and a larger public float. Atari is now a profitable company with no long-term debt and a much stronger cash position to face the challenges of the future."
A final prospectus relating to the offering may be obtained from UBS Securities LLC, 299 Park Avenue, New York, NY 10171-0026; Harris Nesbitt Gerard, Inc., 360 Madison Avenue, New York, NY 10017; and SoundView Technology Group, 1700 East Putnam Avenue, Old Greenwich, CT 06870-1333.