Atari (NASDAQ:ATAR) didn't disappoint. It once again reported operating and net losses; the fourth-quarter release is full of all the gory details.

The company just can't seem to get a break, but that's not surprising; the video game industry is in the midst of a transition to new console systems by Sony (NYSE:SNE), Microsoft (NASDAQ:MSFT), and Nintendo. But you can't blame it all on that macro fact, since Atari has been doing poorly for a long while now.

Let's go right to the data. Net revenues for the fourth quarter declined 15%, to $54.7 million. The operating loss improved to $4.3 million, versus $9.8 million a year ago. The net loss also improved, coming in at $4.3 million ($0.03 per diluted share), compared to a net loss of $9.1 million ($0.07 per diluted share). Excluding restructuring charges, the loss would have been $0.01 per share.

For the year, revenues declined 46.4% to $218.7 million. An operating loss of $66.7 million compares very unfavorably to the operating income of $6.3 million observed in the previous fiscal year. The net loss calculated out to $67.1 million ($0.52 per diluted share), a sore change from the net profit of $5.7 million ($0.05 per diluted share) that the company achieved in its previous fiscal year. Again, restructuring events influenced the loss; without them, it would have been $0.45 per share.

So what happened to make revenues plummet? Atari is doing its best to move inventory from shelves to homes by instigating a value-pricing scheme called the GamersFIRST program; the company stated that this affected reserves in the fourth quarter. That's all fine and dandy, but it shouldn't deter investors from inferring something that the company actually stated for everyone to know: Atari has become riskier than ever. Management isn't even sure if the company can continue on if things don't improve quickly.

Total costs and expenses declined nicely in both the quarter and full fiscal year-- this is a good thing. But as Rich Smith pointed out in his Foolish Forecast, the revenue declines have essentially been wreaking havoc on the bottom line. And as for the margins at the end of the fiscal year -- the less said the better. The year-over-year declines in this area continue the overall woeful thesis.

What can Atari do to survive? I tend to be a big believer in the power of brands, but with one as tarnished as much as Atari's, I'm quite pessimistic about the options available. As CEO Bruno Bonnell states, "We must recapture what made Atari an iconic brand." I agree with his sentiment on the casual-gaming market -- Atari's portfolio probably would be a good fit for that area of video gaming. (I mean, who doesn't like a quick round of Asteroids every now and then?)

But is it going to make a difference to the long-term prospects of the company? Will it ever again be a force to be reckoned with in an industry that it at one time ruled? I really don't see that happening. The company obviously doesn't have the cash flow to compete effectively with the big guns of Activision (NASDAQ:ATVI), Electronic Arts (NASDAQ:ERTS), or THQ (NASDAQ:THQI).

I'm usually the one saying such-and-such video game company will benefit from the upcoming new console cycle. But not this time. And there's no need to talk of valuation here either. Atari is one stock to stay far, far away from. I still have an Atari 2600 -- I'll never get rid of it. But to those who've been speculating on this stock, I'd say it's finally time to cut your losses and run.

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Fool contributor Steven Mallas owns none of the companies mentioned (and he's thankful he doesn't own Atari). The Fool has a disclosure policy .