Atari was once a big name in the video gaming industry, pioneering the home console market before hitting a rough patch. The company went bankrupt in 2013, but it is now looking to make a big splash in the console gaming market once again with a new piece of hardware. The company recently released details about its Ataribox gaming console that's set to be launched at an attractive price point.
But will gamers and consumers warm up to Atari's latest offering after its last foray into this market over two decades ago turned out to be a flop? In other words, is Atari packing enough punch to fight established console makers such as Sony (NYSE:SNE) and Microsoft (NASDAQ:MSFT)? Let's find out.
The Ataribox: A lowdown
The Ataribox console will start shipping in spring 2018 at a price of $249 to $299 depending on the configuration. The company is looking to capitalize on its rich history by offering a selection of classic games, but it won't be limiting itself to just fan service. The device will run the open-source Linux operating system powered by a custom AMD processor, and by the Radeon graphics technology.
So gamers won't be restricted to just the classic Atari games pre-loaded on the device, as its open-source nature could give rise to a wide range of new content by developers. Additionally, Atari is likely to leverage both its old and new content library to make the Ataribox an attractive buying proposition.
But it is the use of AMD's technology -- which also powers Sony's PlayStation and Microsoft's Xbox consoles -- that indicates the Ataribox could pack some serious power for high-end gaming. In fact, Atari is giving its new console a lot of bells and whistles. The Ataribox will come with four USB ports, HDMI output, support for internet connection, and could also come with SD card support to easily transfer data onto the device.
Additionally, the consoles development team has clearly spelled out that consumers can customize the Linux operating system to play games that were initially bought for other platforms. Therefore, it won't be surprising if it can take away some market share from the more established console platforms thanks to the ability to play multi-platform games.
This could be a big deal for Atari as the global console hardware market was worth $10.5 billion last year. Additionally, the spending on games and other intellectual property led to total console gaming revenue of $34.7 billion in 2016, and Sony led the space with 57% market share. More specifically, Sony has sold over 60 million PlayStation 4 consoles in just over three years since launch, outselling the Xbox One by two times.
This year, Sony's grip over the gaming console market is expected to strengthen further. Therefore, it won't be easy for the Ataribox given the robust ecosystem it has already developed around Sony's platforms. Even a big player such as Microsoft hasn't been able to challenge Sony's domination in this space as Xbox One sales have been way lower at 33 million since its November 2013 launch. But Atari has certain tricks in the bag that could work in its favor.
Can the Ataribox make a dent in video gaming hardware?
Atari has smartly priced its new console. By comparison, the Sony PlayStation 4 starts retailing at a price of $299, which could go up significantly depending on the configuration and the gaming bundle. Meanwhile, Microsoft's recently announced Xbox One X has a more premium price point starting at $499.
Therefore, the Ataribox undercuts both these consoles on pricing, while its library of both classic and new games also strengthens the value-for-money proposition. However, Atari's biggest differentiator will be its focus on delivering "a full PC experience for the TV."
The Linux-based operating system of the device will allow users to run apps, browse the web, play music, and stream video. Therefore, the console will also double up as a streaming box that could compete against the likes of the Apple TV. This goes on to strengthen the feature set of the Ataribox, bringing it up to speed with both Sony and Microsoft, at a lower price point.
Additionally, Atari seems to have made a smart move by putting the console up on sale through Indiegogo, a crowd-funding platform with a presence in more than 200 countries. This should ensure that the Ataribox widens its reach among potential console buyers when it is launched.
The Foolish bottom line
The Ataribox checks a lot of boxes. It can play games, double up as a streaming box, and gives Atari fans the chance to engage in the most famous titles from the publisher. Meanwhile, the open-source nature of the operating system opens a whole world of possibilities for cross-platform gaming, and all this happens at an aggressive price point. So it won't be surprising if it becomes a serious contender in the console gaming space and gives both Sony and Microsoft a run for their money.
Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool's board of directors. LinkedIn is owned by Microsoft. Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple and Nvidia. The Motley Fool has a disclosure policy.
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