Atari (NASDAQ:ATAR) reported both fiscal fourth-quarter and year-end earnings yesterday. This is a large set of numbers to digest, so let's dig in and make some sense of them.

For the fourth quarter, net revenue from continuing operations was $62.7 million (the Humongous Entertainment asset was discontinued); last year, revenue was $64.8 million. The company lost $9.1 million, or $0.07 per share, versus a loss of $17.3 million, or $0.14 per share, a year ago. If you take away restructuring charges, then the loss this quarter improves to $4.2 million, or $0.03 per share.

Sales from continuing operations were $395.2 million for fiscal 2005 versus $447.5 million for fiscal 2004. Using generally accepted accounting principles, net income for the year was $5.7 million, or $0.05 per share, against a loss of $38.6 million, or $0.40 per share, in 2004. Eliminating restructuring charges and the effect of the non-cash dividend recorded during the company's recapitalization in September 2003 brings net income for 2005 to $10.6 million, or $0.09 per share, vs. $800,000, or $0.01 per share.

To me, the biggest part of the story is the decline in net revenues. It reveals a couple of things: The Atari brand is suffering in the marketplace at the hands of stronger labels like Activision (NASDAQ:ATVI), Electronic Arts (NASDAQ:ERTS), and THQ (NASDAQ:THQI), and the company is in search of a strong slate of games to propel itself forward. Only time will tell how long that search will be.

Judging from the income statement, Atari has been reining in the selling/distribution expenses, which is admirable. But with all the restructuring going on, one has to wonder when growth will return, and if the publisher will be ready to take full advantage of the new console cycle. The company mentioned in the earnings release that its Atari Flashback Classic Game Console (which Dave Marino-Nachison wrote about last September) continued to sell; perhaps it needs to increase the aggressive leveraging of its library of nostalgic games. Of course, I can hear the groaning response from some shareholders, coming at me in the form of a rhetorical question: "Ah, haven't they beaten that strategy into the ground by now?" Maybe; even with all the anthologies in the marketplace, I still say the company could seek further opportunities, and this might be an area it could redefine for itself.

Some bulls might argue that the losses are improving and that Atari is correctly positioning itself for the future, getting rid of nonessential assets and changing its mindset to better compete. I just can't get excited about this company or stock right now because I'm still not confident in its ability to generate long-term value. Until Atari finds a killer app for itself -- say, along the lines of a Resident Evil or a Grand Theft Auto franchise -- or a stronger content slate, I'd rather go with an Activision or a THQ (especially with the CEO instability at Atari). Someday, though, Atari might rise like a phoenix (remember that old arcade game?) and spread dominating wings over the industry. I'd love to see that. For now, that iconic image must remain in the corner of my imagination.

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Fool contributor Steven Mallas owns none of the companies mentioned. The Fool has a disclosure policy.