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EX99.C.22e60672a1exv99wcw2.htmEX99(C)(2):DUFF&PHELPS,LLCPRESENTATION
Exhibit(c)(2)

FairnessAnalysisConfidentialPresentationtotheSpecialCommitteeoftheBoardofDirectorsApril25,2008STRICTLYCONFIDENTIAL

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DisclaimerThefollowingpagescontainmaterialthatisbeingprovidedbyDuff&Phelps,LLC(Duff&Phelps)totheSpecialCommitteeoftheBoardofDirectors(theCommittee)ofAtari,Inc.(AtariortheCompany)inthecontextofameetingheldtoconsideraproposedtransactionbywhichInfogramesEntertainmentS.A.(IESAorBuyer)willacquirealltheoutstandingcommonstockofAtarinotownedbyIESA(theProposedTransaction).TheaccompanyingmaterialwascompiledorpreparedonaconfidentialbasisforthesoleuseoftheCommitteeandnotwithaviewtowardpublicdisclosure.BecausethismaterialwaspreparedforuseinthecontextofanoralpresentationtotheCommittee,whichisfamiliarwiththebusinessandaffairsofAtari,neitherAtarinorDuff&Phelps,noranyoftheirrespectivelegalorfinancialadvisorsoraccountants,takeanyresponsibilityfortheaccuracyorcompletenessofanyofthematerialifusedbypersonsotherthantheCommittee.ThesematerialsarenotintendedtorepresentanopinionbutrathertoserveasdiscussionmaterialsfortheBoardtoreviewandasabasisuponwhichDuff&Phelpsmayrenderan
opinionastothefairness,fromafinancialpointofview,tothestockholdersoftheCompanyotherthanIESA(thePublicShareholders)oftheconsiderationtobereceivedbysuchholdersintheProposedTransaction.Anopinionwouldnoti)addressthemeritsoftheunderlyingbusinessdecisionofAtaritoenterintotheProposedTransactionii)constitutearecommendationtoAtari,theBoardofDirectorsofAtari,theCommittee,thestockholdersofAtari,oranyotherpersonastohowsuchpersonshouldvoteorastoanyotherspecificactionthatshouldbetakeninconnectionwiththeProposedTransactionoriii)createanyfiduciarydutyonDuff&Phelpssparttoanyparty.TheinformationutilizedinpreparingthispresentationwasobtainedfromAtari,publicsources,andnonpublicsources.AnyestimatesandprojectionscontainedhereinhavebeenpreparedbytheseniormanagementofAtariandinvolvenumerousandsignificantsubjectivedeterminations,whichmayormaynotprovetobecorrect.Duff&Phelpsdidnotattempttoindependentlyverifysuchinformation.Norepresentationorwarranty,expressedorimplied,ismadeastotheaccuracyorcompletenessof
suchinformationandnothingcontainedhereinis,orshallberelieduponas,arepresentation,whetherastothepastorthefuture.NoselectedcompanyorselectedtransactionusedinouranalysisisdirectlycomparabletoAtari,IESA,ortheProposedTransaction.STRICTLYCONFIDENTAL

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Assumptions,QualificationsandLimitingConditionsDuff&Phelpshasmadenumerousassumptionswithrespecttoindustryperformance,generalbusiness,marketandeconomicconditionsandothermatters,manyofwhicharebeyondthecontrolofanypartyinvolvedintheProposedTransaction.Ouranalysisisnecessarilybaseduponmarket,economic,financialandotherconditionsastheyexistandcanbeevaluatedasofthedatehereof.Duff&Phelpsassumedthatanyestimates,evaluationsandprojections(financialorotherwise)furnishedtoDuff&Phelpswerereasonablypreparedandbaseduponthebestcurrentlyavailableinformationandgoodfaithjudgmentofthepersonorpersonsfurnishingthesame.Duff&Phelpsassumedthatallgovernmental,regulatoryorotherconsentsandapprovalsnecessaryfortheconsummationoftheProposedTransactionwillbeobtainedwithoutanyadverseeffectontheCompanyorthecontemplatedbenefitsexpectedtobederivedintheProposedTransaction.Duff&PhelpsassumedwithoutverificationtheaccuracyandadequacyofthelegaladvicegivenbycounseltoAtarionalllegalmatterswithrespecttotheProposed
TransactionandassumedallproceduresrequiredbylawtobetakeninconnectionwiththeProposedTransactionhavebeen,orwillbe,duly,validlyandtimelytakenandthattheProposedTransactionwillbeconsummatedinamannerthatcompliesinallrespectswiththeapplicableprovisionsoftheSecuritiesActof1933,asamended,theSecuritiesExchangeActof1934,asamended,andallotherapplicablestatutes,rulesandregulations.Duff&Phelpsdidnotmakeanyindependentevaluation,appraisalorphysicalinspectionofeithertheCompanysorIESAssolvencyorofanyspecificassetsorliabilities(contingentorotherwise).Thispresentationshouldnotbeconstruedasavaluationopinion,creditrating,solvencyopinion,ananalysisofeithertheCompanysorIESAscreditworthinessorastaxadviceorasaccountingadvice.Duff&Phelpshasnotbeenrequestedto,anddidnot,(a)negotiatethetermsoftheProposedTransactionor(b)advisetheBoardofDirectorsoranyotherpartywithrespecttoalternativestotheProposedTransaction.Inaddition,Duff&PhelpsisnotexpressinganyopinionastothemarketpriceorvalueoftheCompanyscommonstockafter
announcementoftheProposedTransaction.Duff&PhelpsrelieduponthefactthattheBoardofDirectorsoftheCompany,theCommitteeandtheCompanyhavebeenadvisedbycounselastoalllegalmatterswithrespecttotheProposedTransaction,includingwhetherallproceduresrequiredbylawtobetakeninconnectionwiththeProposedTransactionhavebeenduly,validlyandtimelytakenandDuff&Phelpshasnotmade,andassumesnoresponsibilitytomake,anyrepresentation,orrenderanyopinion,astoanylegalmatter.STRICTLYCONFIDENTIAL

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TableofContents

I.OverviewofProposedTransaction

II.ObservationsRegardingAtari

III.PublicMarketValue

IV.SelectedPublicCompanyAnalysis

V.SelectedM&ATransactionAnalysis(ValuationMultiples)

VI.SelectedM&ATransactionAnalysis(PremiumsPaid)

VII.NetAssetValueAnalysis

VIII.LiquidationAnalysis

4STRICTLYCONFIDENTIAL

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I.OverviewofProposedTransactionSTRICTLYCONFIDENTIAL

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OverviewofProposedTransactionTransactionOverviewOnMarch6,2008,Atari,Inc.(AtariortheCompany)receivedanonbindingexpressionofintentfromInfogramesEntertainmentS.A.anditsaffiliates(IESAortheBuyer),whichowns51.6%oftheoutstandingsharesofAtari,toacquirealltheoutstandingcommonstockofAtarinotownedbyIESAforapersharecashamountof$1.68(theProposedTransaction).OnMarch5,2008,theclosingpricepershareoftheAtaricommonstockwas$1.68.OnMarch11,2008,Duff&Phelps,LLC(Duff&Phelps)wasengagedasfinancialadvisortoprovideanopiniontotheSpecialCommitteeoftheBoardofDirectorsofAtari(theSpecialCommittee)astothefairness,fromafinancialpointofview,tothestockholdersoftheCompanyotherthanIESA(thePublicShareholders)oftheconsiderationtobereceivedbysuchholdersintheProposedTransaction.OnbehalfoftheSpecialCommittee,Duff&PhelpsheldmeetingsanddiscussionswithAtarimanagementandAlixPartners,theCompanysrestructuringadvisors,undertookinitialevaluationoftheCompanyandreachedpreliminaryvaluationfindings.
AtthedirectionoftheSpecialCommittee,Duff&PhelpssubsequentlyengagedinlimiteddiscussionswithLazard,Ltd.(Lazard),financialadvisortoIESA,withregardtothepersharecashconsiderationof$1.68(PerShareCashConsideration).OnMarch18,2008,LazardinformedDuff&PhelpsthatIESAwasnotwillingtoincreasethePerShareCashConsideration.LazardcommunicatedonbehalfofIESAthatthepersharepriceofthecommonstockhadincreasedinthefewdaysbeforetheannouncementoftheProposedTransactionandthePerShareCashConsiderationrepresentedapremiumtothesharepricefivedaysand30dayspriortotheannouncement.AfterreviewingthePerShareCashConsiderationwiththeSpecialCommitteeandMilbankTweedHadleyMcCloyLLP(Milbank),legaladvisortotheSpecialCommittee,andatthedirectionoftheSpecialCommittee,MilbankengagedindiscussionswithlegalcounselofIESAtorequestclarificationonthefollowing:IESAsintentionwithrespecttofundingtheCompanysoperatinglossesandworkingcapitalneedsthroughthecompletionoftheProposedTransactionIESAsintentionwithrespectto
obtaininganextensionontheforbearanceagreementwithBlueBayAssetManagementplc(BlueBay)andTheminimumshareholderapprovalIESAisrequiringtocompletetheProposedTransaction.OnApril11,2008,AtarireceivedthefirstdraftofthemergeragreementeffectingtheProposedTransaction.OnApril21,2008,Atarireceivedthefirstdraftofthecreditagreementprovidingfinancialsupportthroughclosing.BetweenApril11andApril24,Atari,IESA,BlueBay,theCommitteeandtheirrespectivecounselengagedinnumerousdiscussionsanddraftrevisionsofthetransactiondocuments.STRICTLYCONFIDENTIAL

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OverviewofProposedTransactionSummaryofDueDiligenceInconnectionwithouranalysis,wehavemadesuchreviews,analysesandinquiries,aswehavedeemednecessaryandappropriateunderthecircumstances.Duff&Phelpsalsotookintoaccountitsassessmentofgeneraleconomic,marketandfinancialconditions,aswellasitsexperienceinsecuritiesandbusinessvaluation,ingeneral,andwithrespecttosimilartransactions,inparticular.OurduediligenceandanalysiswithregardstotheProposedTransactionincluded,butwasnotlimitedto,theitemssummarizedbelow.Discussedtheoperations,financialconditions,futureprospectsandprojectedoperationsandperformanceoftheCompanyandtheProposedTransactionwiththemanagementoftheCompanyReviewedadraftoftheMergerAgreementdatedApril23,2008ReviewedadraftoftheCreditAgreementdatedApril22,2008ReviewedcertainpubliclyavailablefinancialstatementsandotherbusinessandfinancialinformationoftheCompanyandIESA,respectively,andtheindustriesinwhichtheyoperateReviewedcertaininternalfinancialstatementsandotherfinancialandoperatingdata
concerningtheCompany,whichtheCompanyhasrespectivelyidentifiedasbeingthemostcurrentfinancialstatementsavailableReviewedcertainfinancialforecasts,aswellasinformationrelatingtocertainstrategic,financialandoperationalbenefitsanticipatedfromtheProposedTransaction,allaspreparedbythemanagementoftheCompanyReviewedthehistoricaltradingpriceandtradingvolumeoftheCompanyCommonStock,andthepubliclytradedsecuritiesofcertainothercompaniesthatwedeemedrelevantComparedthefinancialperformanceoftheCompanyandthepricesandtradingactivityoftheCompanyCommonStockwiththoseofcertainotherpubliclytradedcompaniesthatwedeemedrelevantComparedcertainfinancialtermsoftheProposedTransactiontofinancialterms,totheextentpubliclyavailable,ofcertainotherbusinesscombinationtransactionsthatwedeemedrelevantandConductedsuchotheranalysesandconsideredsuchotherfactorsaswedeemedappropriate.STRICTLYCONFIDENTIAL

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OverviewofProposedTransactionFairnessConsiderationsIndeterminingwhetherthePerShareCashConsiderationtobereceivedbythePublicShareholdersintheProposedTransactionbefair,fromafinancialpointofview,tothePublicShareholders,Duff&Phelpsconsidered,amongotherfactors:Thecurrent,historicalandprojectedfinancialperformanceoftheCompanybasedonareviewoftheCompanyswellasourdiscussionswiththeCompanysmanagementandtheiradvisorsThePerShareCashConsiderationrelativetorecentandhistorictradingpricesofAtaricommonstockTheadequacyofthepremiumimpliedbythePerShareCashConsiderationrelativetothepremiumspaidinselectedpublictoprivatetransactionsandSeveralvaluationmethodologies,including:SelectedpubliccompanyanalysisSelectedM&Atransactionanalysis(valuationmultiples)NetassetvalueanalysisLiquidationanalysisTheCompanyscurrentcashandliquiditypositionanditsprospectsforobtainingadditionalcashinfusionsfrompersonsotheraffiliates.Inconnectionwiththenegotiationofamerger,IESAandtheCompanyarenegotiatingacreditagreement
whichwillAtarisliquidityconstraints.Adiscountedcashflow(DCF)analysiswasnotutilizedasmanagementdoesnotprepareprojectionspastoneyear.STRICTLYCONFIDENTIAL

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OverviewofProposedTransactionValuationBenchmarksDuff&PhelpsconsideredseveralvaluationapproachestoestablishvaluationbenchmarksagainstwhichtocomparethePerShareCashConsideration:PublicMarketValuationDuff&PhelpsanalyzedtheclosingpriceandtradingvolumeofAtaricommonstockoverthepast12months.ThisanalysiswasusedtodeterminetherangeoffairmarketvaluethemarkethasascribedtothecommonstockpriortoandonthedateoftheannouncementoftheProposedTransaction.SelectedPublicCompanyAnalysisDuff&PhelpsreviewedvaluationmultiplesofselectedpubliclytradedcompaniesandappliedvaluationmultiplestoAtarisselectedrecentoperatingresults.TheCompanysnegativeEBITDAlimitedtherelevanceofthemethodologytotheapplicationofenterprisevaluetorevenuemultiplesfortheselectedcompanies.SelectedM&ATransactionAnalysis(MultiplesValuation)Duff&PhelpsreviewedvaluationmultiplesofselectedM&AtransactionsandappliedvaluationmultiplestoAtarisselectedrecentoperatingresults.TheCompanysnegativeEBITDAlimitedtherelevanceofthemethodologytothe
applicationofenterprisevaluetorevenuemultiplesfortheselectedM&Atransactions.SelectedM&ATransactionAnalysis(PremiumsPaid)Duff&Phelpsreviewedthepremiumspaidinpublictoprivatetransactionsinwhichthemajorityshareholderpurchasedtheremainingminorityequitystake.Duff&Phelpscomparedthepremiumsoverthe1day,5dayand30daytradingpricepriortotheannouncementofsuchtransactionstotheimpliedpremiumintheProposedTransaction.PremiumspaidanalysisisrelevantbutlimitedbytheCompanysdependenceonIESA,themajorityshareholderintheCompany.NetAssetValueAnalysisDuff&PhelpsreviewedtheCompanysauditedbalancesheetasofDecember31,2007andtheCompanyspreliminaryinternalbalancesheetasofMarch31,2008todeterminethenetassetvalueofAtariandaddedthefairmarketvalueoftheCompanysintellectualproperty.Indeterminingthefairmarketvalueoftheintellectualproperty,Duff&Phelpsrelied,withindependentverificationthereof,oninformationprovidedbymanagement,includingthirdpartyappraisals.LiquidationAnalysisSincetheCompanyisinviolationofits
weeklycashflowcovenantsonitsSeniorSecuredCreditfacilityprovidedbyBlueBay,Duff&PhelpsalsoanalyzedthepotentialrecoveriesbyholdersofAtariscommonstockinaChapter11bankruptcy.STRICTLYCONFIDENTIAL

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II.ObservationsRegardingAtariSTRICTLYCONFIDENTIAL

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ObservationsRegardingAtariCompanyOverviewFoundedin1992asGTInteractiveSoftwareCorporationandheadquarteredinNewYork,NY,theCompanycompletedaninitialpublicofferingin1996.In1999,IESA,aFrenchcorporationlistedontheEuronext,acquiredbeneficialownershipofamajorityshareoftheoutstandingcommonstockoftheCompanyandsubsequentlyrenamedtheCompanyInfogrames,Inc.InMay2003,theCompanychangeditsnametoAtari,Inc.andbegantradingontheNasdaqunderthetickerATAR.IESAcurrentlyowns51.6%ofAtariscommonstock.Atariengagesinthepublishing,development,anddistributionofvideogamesoftwareprimarilyinNorthAmerica.Ataridistributesvideogamesforvariousplatforms,includingSonyPlayStation2,PlayStation3andPSP,NintendoWiiandDS,andMicrosoftXboxandXbox360,aswellasforpersonalcomputers.TheCompanyhasobtainedtherighttousetheAtaribrandnameunderalicensegrantedfromAtariInteractive,Inc.,anIESAsubsidiary,thatexpiresin2013.Twootherlicenseagreementsexpireinthenextfiveyears:TheDragonBallZlicenseagreement,whichis
Atarislargesttitleandrepresentedapproximately28%oftotalnetrevenueinFY2007,expiresinJanuary2010IESAdistributionagreementsrepresented56%oftotalnetrevenueinFY2007.TheagreementsincludetheOldDistributionAgreement,enactedin1999,whichgovernsthedistributionofAtarisclassicgamelibraryaswellasaShortFormDistributionAgreement,enactedin2007,governingnewreleases.TheOldDistributionAgreementwouldterminateifIESAreduceditsholdingsinAtaritobelow25%.TheShortFormDistributionAgreementexpiresinDecember2010Until2005,Atariwasactivelyinvolvedindevelopingvideogamesandinfinancingdevelopmentofvideogamesbyindependentdevelopers,whichAtariwouldpublishanddistributeunderlicensesfromthedevelopers.Beginningin2005,becauseofcashconstraints,Atarisubstantiallyreduceditsinvolvementindevelopmentofvideogamesandannouncedplanstodivestitsinternaldevelopmentstudios.Source:SECfilings,equityresearch,BloombergandAtariboardpresentationsSTRICTLYCONFIDENTIAL

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ObservationsRegardingAtariCompanyOverview(Continued)Duringfiscalyears2006and2007,Atarisoldanumberofintellectualpropertiesanddevelopmentfacilitiesinordertoobtaincashtofundoperations.During2007,Atariraisedapproximately$35.0millionthroughthesaleoftherightstoitsTestDrivergamesandcertainotherintellectualproperty,andthesaleofitsReflectionsandShinystudios.Bytheendof2007Atarinolongerownedanydevelopmentstudios.AtarialsoexitedthesoftwaredistributionbusinesswhichfurthercontributedtotheCompanysdecreasingrevenue.ThereductionofdevelopmentactivitiessignificantlyreducedthenumberofgamesthatAtaripublished.AtarihasprojectedFY2008netrevenueof$78.6millionafterregisteringLTMnetrevenueasofDecember31,2007of$91.8million.DuringFY2007,netrevenuefrompublishingactivitieswere$104.0million,comparedwith$153.6millionduringFY2006and$289.6millionduringFY2005.Atarisbudgetforfiscalyear2009projectsnetrevenueof$126.5millionandEBITDAof$2.0million.ThebudgetishighlydependentonIESAsreleasescheduleandthesuccessofeachnew
titlerelease.Thebudgetwillrequirefundingofasmuchas$18millionandtheCompanysabilitytoobtainadditionalfinancingisuncertain.TheCompanyisengagedinamultifacetedrelationshipwiththeParent,whichresultsinthemajorityofAtarisproductcomingfromIESA.Historically,AtarihasalsoreliedonIESAforfundingwhichhascomeintheformofthesaleofproductionstudiosandintellectualpropertytoIESAaswellasloanfacilitiesfromIESAslargestshareholder,BlueBay.Source:SECfilings,equityresearch,BloombergandAtariboardpresentationsSTRICTLYCONFIDENTIAL

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ObservationsRegardingAtariChronologyofRecentEvents(April2007YTD2008)April5,2007AtariannouncesthatitsChairman/ActingCFOBrunoBonnellisdeparting.BonnellsdeparturefromAtaricomesatthesametimeashisdepartureasCEOanddirectorofIESA.May1,2007Atariannouncesa20%workforcereduction.May22,2007AtarielectsArturoRodrigueztoserveasactingChiefFinancialOfficeruntilsomebodyiselectedtoservepermanentlyinthatcapacity.July24,2007TheBoardofDirectorselectsMichaelG.Corrigan,amemberoftheBoardsinceNovember2005,toserveasitsnonexecutiveChairman.September7,2007AtariannouncestheresignationofMarcelNicolaiasSeniorVicePresident,ProductDevelopmentOperationsandChiefTechnologyOfficer.September18,2007TheCompanyfilesitsSECForm10KfortheperiodendingMarch31,2007inwhichDeloitte&ToucheLLPgivesaqualifiedopinionexpressingdoubtthattheCompanycancontinueasagoingconcern.October1,2007GuggenheimCorporateFundingLLC(Guggenheim)providesawaiverofcovenantdefaultsasofJune30,2007andreducesthe
aggregateborrowingcommitmentoftherevolvinglineofcreditto$3million(downfrom$10million).October5,2007JamesAckerly,RonaldC.Bernard,MichaelG.Corrigan,DennisGuyennotandAnnE.KronenareremovedfromtheBoardofDirectorsofAtaribyactiontakenbyIESA.October10,2007CurtisSolsvigIIIisappointedAtarisChiefRestructuringOfficerandAlixPartners,afirmatwhichMr.SolsvigisaManagingDirector,isretainedtoadvisetheCompanyonitsoperationalrestructuringinitiatives.October15,2007AtariannouncestheappointmentofWendellAdair,EugeneI.Davis,JamesB.Shein,andBradleyE.Scherasindependentboardmembers.InconjunctionwiththeirrespectiveappointmentstoAtarisBoardofDirectors,MessrsAdair,Davis,SheinandScherareappointedtoserveontheboardsSpecialCommittee.October18,2007Atariconsentstothetransferoftheloansoutstandingof$3millionfromGuggenheimtoanaffiliateofBlueBay.October23,2007BlueBayamendsthecreditagreement,increasingAtarisborrowingcapacityto$10million.STRICTLYCONFIDENTIAL

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ObservationsRegardingAtariChronologyofRecentEvents(April2007YTD2008)November13,2007AtariannouncesabusinessrestructuringplantofocustheCompanysolelyonpublishinganddistribution.TheCompanyalsoannouncedlicenseagreementswithIESAregardingtheTestDrivefranchisegrantingIESAexclusiverightstothefranchise.AtarialsoannouncestheremovalofDavidPierceasCEO.CurtisSolsvig,currentlytheChiefRestructuringOfficer,assumestheroleofInterimCEO.December10,2007AtariamendsitsBlueBaycreditfacility,increasingAtarisborrowingcapacityfrom$10millionto$14million.February12,2008AtarireportsearningsforthethirdquarterFY2008andninemonthsendedDecember31,2007.Despitedecreasingrevenue,Atariscostcuttingeffortsresultedinslightlyimprovedoperatingloss(quarteroverquarterresults).Asaresultofcovenantviolations,theCompanyentersintoaforbearanceagreementwithBlueBay.March6,2008AtarireceivesaletterfromIESAregardinganonbindingexpressionofintenttoacquiretheoutstandingcommonstockofAtarinotownedbyIESAforapersharecashpriceof
$1.68.March24,2008AtarireceivesaStaffDeterminationLetterfromtheNasdaqListingQualificationsDepartmentstatingthatAtarihasnotgainedcompliancewiththerequirementsofNasdaqMarketplaceRule4450(b)(3),andthatitssecuritiesarethereforesubjecttodelistingfromTheNasdaqGlobalMarket.Atarihasrequestedahearinganduntiladeterminationisreached,theCompanysshareswillcontinuetotradeontheNasdaq.March26,2008AtariannouncesthatThomasSchmider,CoFounderandCOOofIESA,resignedasamemberofAtarisBoardofDirectorseffectiveMarch21,2008.March31,2008AtariannouncestheappointmentofJimWilsonasitsCEOandPresident,effectiveimmediately.Mr.WilsonisassumingtheresponsibilitiesofCEOwhichhavebeenoverseenbyCurtisG.SolsvigIII,AtariInc.sChiefRestructuringOfficersinceOctober2007.April4,2008AtariannouncesthatCurtisG.SolsvigIIIresignedascompanysChiefRestructuringOfficereffectiveApril2,2008.Mr.SolsvigwillcontinuetoprovideservicestothecompanypursuanttoanengagementletterpreviouslyenteredintobetweenAtariandAlixPartnersLLP,which
wasretainedtoassistthecompanythroughitsrestructuringprocess.April22,2008AtariannouncesthatJeanMichelPerbet,DeputyCOOofIESAandChairmanofIESAEurope,resignedasamemberofAtarisBoardofDirectorseffectiveApril16,2008.April24,2008Atari,IESA,BlueBay,theCommitteeandtheirrespectivecounselengagedinnumerousdiscussionsanddraftrevisionsofthetransactiondocuments.STRICTLYCONFIDENTIAL

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ObservationsRegardingAtariFinancialSummaryThedeteriorationofAtarisbusinesshasresultedfromincreasedcompetition,aweakproductpipeline,anindustrywidedeclineinaveragesellingpriceforgamesoftware,lackofanonlinepresenceandlossofinternaltalentandleadership.AtariscurrentbudgetforFY2009isdependentonthetimelyreleaseandsuccessofnewgamesandtheCompanysabilitytosecureadditionalfinancing.Atari,Inc.HistoricalandProjectedFinancialPerformanceFiscalYearEndedMarch31,($inmillions)FY2003AFY2004AFY2005AFY2006AFY2007ALTM(U)FY2008EFY2009BNetRevenue$506.5$468.9$343.8$206.8$122.3$91.8$79.2$124.2Growthna(7.4%)(26.7%)(39.8%)(40.9%)(24.9%)(35.2%)35.3%CostofGoodsSold257.6260.1203.6136.774.852.741.480.4GrossProfit248.9208.8140.270.147.539.137.943.8GrossMargin49.1%44.5%40.8%33.9%38.8%42.6%47.8%35.2%S,G&A129.5117.794.073.447.139.739.243.2R&D75.478.258.351.927.720.19.40.5D&A7.59.27.05.23.01.93.82.7______TotalOperatingExpenses212.4205.1159.3130.577.861.752.446.5
EBIT36.53.7(19.1)(60.4)(30.3)(22.6)(14.5)(2.7)EBITMargin7.2%0.8%(5.6%)(29.2%)(24.8%)(24.6%)(18.4%)(2.2%)EBITDA$44.0$13.0($12.1)($55.1)($27.3)($20.8)($12.3)$0.2EBITDAMargin8.7%2.8%(3.5%)(26.6%)(22.3%)(22.7%)(15.6%)0.2%LTM=AsofDecember31,2007(3rdQuarterFY2008)EBITDA=Earningsbeforeinterest,taxes,depreciationandamortization,adjustedforonetimegainsorlossesonthesaleofassetsandinvestments,discontinuedoperations,restructuringexpensesandgoodwillwritedowns.InFY2007,theCompanyincurreda$54.1milliongoodwillwritedown.Source:CompanySECFilingsandCompanyManagementprojectionsSTRICTLYCONFIDENTIAL

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ObservationsRegardingAtariBalanceSheetSummaryAsofDecember31,2007,Atarisworkingcapitalwasnegative$10.3millionanditsstockholdersequitywasnegative$16.8million.Asaresultofsubstantialoperatinglossesandsignificantcashrequirementstofundworkingcapital,Atariisliquidityconstrainedanditsabilitytosecureadditionalfinancingisuncertain.Atari,Inc.BalanceSheetSummary($inmillions)December31,March31,December31,March31,2006200720072008(Estimated)Cash$3.6$7.6$5.4$10.0Receivables,net23.29.516.2(0.3)Inventories13.48.87.46.5PrepaidExpensesandOtherCurrentAssets16.39.76.07.7TotalCurrentAssets56.535.634.924.0NetProperty,Plant&Equipment3.84.26.36.4GoodwillandIntangibles55OtherLongTermAssets3.93.02.22.1TotalAssets$119.5$42.8$43.5$32.6AccountsPayable$13.3$11.0$10.6$9.7AccruedLiabilities15.413.411.56.8RoyaltiesPayable3.34.33.82.7CreditFacility7.014.014.0DuetoRelatedParties9.95.75.32.7OtherCurrentLiabilities0.40.9TotalCurrentLiabilities49.334.445.236.8DuetoRelatedParties,LongTerm1.41.93.0
3.6LongTermDeferredRent6.77.1RelatedPartyLicenseAdvance5.15.4OtherLongTermLiabilities2.03.40.3TotalLiabilities52.739.760.352.9StockholdersEquity66.83.1(16.8)(20.3)TotalLiabilities&StockholdersEquity$119.5$42.8$43.5$32.6Source:CompanySECFilings,ManagementEstimatesSTRICTLYCONFIDENTIAL

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ObservationsRegardingAtariFY2009MonthlyBudgetAtarisFY2009budgetishighlydependentonAtaris(i)developmentpartners(principallyIESA)releasingtheirrespectivegametitlesontimeandtheperformanceofthesetitles,(ii)abilitytostreamlineitsoperations,(iii)abilitytoinstillstabilityinmanyseniormanagementrolesand(iv)abilitytosecureadditionalfinancing.Atari,Inc.ProjectedFinancialPerformanceFY2009BudgetbyMonthFiscalYearEndingMarch31($inthousands)AprilMayJuneJulyAugustSeptemberOctoberNovemberDecemberJanuaryFebruaryMarchTotalNetRevenue$3,417$4,258$29,707$7,387$4,055$6,206$10,216$21,490$8,839$4,863$11,234$12,505$124,176GrowthOverPriorYearPeriod(11.6%)(0.8%)1,223.0%15.4%(15.4%)194.8%6.7%24.1%(31.2%)(10.1%)111.9%350.9%60.9%CostofGoodsSold2,0972,62018,3444,6382,5653,1936,76614,9655,8893,3417,6568,33780,412GrossProfit1,3201,63811,3632,7491,4903,0133,4496,5252,9511,5223,5784,16843,765GrossMargin38.6%38.5%38.2%37.2%36.7%48.5%33.8%30.4%33.4%31.3%31.8%
33.3%35.2%TotalOperatingExpenses2,6904,1416,6943,8582,7554,2664,5084,0733,1033,4473,8543,11746,505EBIT(1,371)(2,503)4,669(1,109)(1,265)(1,253)(1,059)2,453(152)(1,925)(276)1,050(2,741)EBITMargin(40.1%)(58.8%)15.7%(15.0%)(31.2%)(20.2%)(10.4%)11.4%(1.7%)(39.6%)(2.5%)8.4%(2.2%)EBITDA($1,052)($2,186)$4,982($800)($1,040)($1,031)($840)$2,670$64($1,717)($69)$1,255$237EBITDAMargin(30.8%)(51.3%)16.8%(10.8%)(25.6%)(16.6%)(8.2%)12.4%0.7%(35.3%)(0.6%)10.0%0.2%Source:CompanyManagementSTRICTLYCONFIDENTIAL

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ObservationsRegardingAtariSummaryofActualandProjectedCashReceiptsandDisbursementsAnanalysisofprojectedcashreceiptsanddisbursementsforFY2009throughSeptember2008preparedbytheCompanyindicatesttheCompanywillneedtoobtainadditionalfundingasearlyasMay2008.CashfundingrequirementsarehighestinJune2008(negative$19million).Atari,Inc.CashReceipt/DisbursementSchedule($inthousands)DecemberJanuaryFebruaryMarchAprilMayJuneJulyAugustSeptember2007200820082008200820082008200820082008ActualActualActualActualProjectedProjectedProjectedProjectedProjectedProjectedReceiptsPublishing7,39811,54511,9489782,1941,0872,0149,22215,8956,006Licensing/Other5962317403651574444774156741RelatedParty(Royalty/other)323755265934431,007975334335441TotalReceipts8,31712,53112,9531,1073,1522,8373,4369,63016,3877,188DisbursementsManufacturing(COGS)1,4301,0391,1363521,0403,8991,9761,4792,9752,823RelatedParty(Royalty/Other)1,900
4,0039440000000Research&Development1,2281,022172362,5522,126898505658Advertising5386537448593805231,2141,9122,4691,407Distribution/Freight27747033625303254282264408286Royalties3,14601,0713824282981402,2130Overhead5,6592,2153,2415884,5582,5252,2462,2891,9781,955TotalDisbursements14,1789,4037,6441,8999,07410,1556,6976,03510,0996,530CashFlow(5,861)3,1285,309(792)(5,922)(7,318)(3,261)3,5956,288658CashBalanceBeginningCashBalance(4,393)(10,254)(7,126)(2,761)(2,561)(8,483)(15,801)(19,062)(15,466)(9,178)CashflowfromOperations(5,861)3,1285,309(792)(5,922)(7,318)(3,261)3,5956,288658EndingCash(10,254)(7,126)(1,817)(3,553)(8,483)(15,801)(19,062)(15,466)(9,178)(8,520)CashFundingbymonthCashFundinginaggregate14,00014,00014,00014,00014,00014,00014,00014,00014,00014,000NetCash3,7466,87412,18310,4475,517(1,801)(5,062)(1,466)4,8225,480Source:CompanyManagementNote:ThisanalysiswasderivedfromaweeklyanalysisperformedbytheCompanyanditsrestructuringadvisors.STRI
CTLYCONFIDENTIAL

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III.PublicMarketValueSTRICTLYCONFIDENTIAL

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PublicMarketValueAtariCommonStockDataAtariisaNASDAQlistedcompanywith13,477,920sharesoutstanding.OnApril22nd,2008,Ataricommonstockclosedat$1.50whichisbelowIESAsPerShareCashConsiderationanddownapproximately61%fromits52weekhighof$3.84.ATARICOMMONSTOCKDATAAPRIL23,2007THROUGHAPRIL22,2008OfferPrice(March6th,2008)$1.68PricePriortoAnnouncement$1.681DayPremium0.0%5DayPremium6.3%30DayPremium58.5%ClosingPriceon4/22/2008$1.5052WeekHighEnded4/22/2008$3.8452WeekLowEnded4/22/2008$0.86SharesOutstanding13,477,920AverageDailyTradingVolume(3mos.)27,425InstitutionalOwnership27.09%InsiderOwnership51.58%AnalystCoverageWedbushMorganSource:BloombergandCapitalIQSTRICTLYCONFIDENTIAL

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PublicMarketValueAtariCommonStockData(Continued)Atarissharesarethinlytraded,withaveragedailytradingvolumeinthelastthreemonthsof27,424Inthelasttwelvemonths,AtarisshareshavetradedaboveandbelowPerShareCashConsiderationanditsvolumeweightedpricewas$1.45SincethereleaseofAtarismostrecentForm10QonFebruary13,2008throughApril22nd,2008,theCompanysvolumesharepriceis$1.55.$51,000900$4800February13,2008Atarireleasesits10QfortheMarch6,2008IESAs700(Thousands)periodendingDecemberofferforAtariof$1.68$331,2007(firstninepershareannounced600monthsofFY2008)500Price$2400Volume$1.68pershareofferprice300$1200100$4/23/20077/3/20079/13/200711/23/20072/6/20084/18/2008Source:BloombergSTRICTLYCONFIDENTIAL

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IV.SelectedPublicCompanyAnalysisSTRICTLYCONFIDENTIAL

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SelectedPublicCompanyAnalysisPubliclyTradedCompanyAnalysisMethodologyDuff&PhelpsreviewedthecurrenttradingmultiplesofsixpubliclytradedcompaniesthatDuff&Phelpsdeterminedtoberelevanttoitsanalysis.Duff&PhelpsanalyzedtheLTMandprojectedrevenuesandEBITDAforeachofthepubliclytradedcompanies.Duff&Phelpsthenanalyzedthepeergroupstradingmultiplesofenterprisevalue(EV)totheirrespectiveLTMandprojectedrevenuesandEBITDA.EViscalculatedasthesumoftheequitymarketvalue(dilutedsharesoutstandingmultipliedbythecurrentstockprice)andnetindebtedness.Duff&Phelpsusedthefollowingmethodologytoselectcompanies:PrimaryandSecondarySICCodes:7372(prepackagedsoftware),5045(computersandcomputerPeripheralequipmentandsoftware)and7822(motionpictureandvideotapedistribution).Duff&PhelpsreviewedvariousSECdocumentsandequityresearchreportsfordetailsregardingthenatureofeachselectedcompanysbusinessandfinancialperformance.Duff&Phelpsexcludedthosecompanieswithamarketcapitalizationequaltoorinexcessof$1billion.
Sixcompanieswereselectedfallingundertwocategories:SmallCapVideoGameDevelopers,PublishersandDistributors(MajescoEntertainmentCo.andMidwayGamesInc.)PackagedMediaDistributors(HandlemanCo.,ImageEntertainmentInc.,NavarreCorp.andSourceInterlinkCompanies,Inc.)Noneofthecompaniesutilizedforcomparativepurposesinthefollowinganalysisis,ofcourse,identicaltoAtari.Accordingly,acompletevaluationanalysiscannotbelimitedtoaquantitativereviewoftheselectedcompaniesandinvolvescomplexconsiderationsandjudgmentsconcerningdifferencesinfinancialandoperatingcharacteristicsofsuchcompanies,aswellasotherfactorsthatcouldaffecttheirvaluerelativetothatofAtari.STRICTLYCONFIDENTIAL

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SelectedPublicCompanyAnalysisPubliclyTradedCompanyAnalysis($inmillionsexceptpersharedata)23Apr08%ofEnterpriseValueasaMultipleofLTMStock52WkMarketEnterpriseRevenueEBITDAEBITDARevenueCompanyPriceHighValueValue2007A2008E2009E2007A2008E2009EMarginGrowthSmallCapVideoGameDevelopers,PublishersandDistributorsMajescoEntertainmentCo.$1.1143.2%$31.9$23.70.43x0.36x0.34x4.6xNMNM9.3%(7.4)%MidwayGamesInc.2.3931.7%220.0293.91.87x1.29x1.16xNMNMNMNM(5.1)%High43.2%1.87x1.29x1.16x4.6xNANA9.3%(5.1)%Median37.4%1.15x0.83x0.75x4.6xNANA9.3%(6.2)%Mean37.4%1.15x0.83x0.75x4.6xNANA9.3%(6.2)%Low31.7%0.43x0.36x0.34x4.6xNANA9.3%(7.4)%PackagedMediaDistributorsHandlemanCo.$0.445.8%$9.0$66.60.06xNMNM9.7xNMNM0.6%(10.1)%ImageEntertainmentInc.1.3129.1%28.554.30.54xNMNMNMNMNM
1.1%0.1%NavarreCorp.1.6236.0%58.7111.80.16x0.17x0.17x3.4x3.8xNM4.6%7.9%SourceInterlinkCompanies,Inc.1.4419.5%75.31,444.50.64xNMNM10.6xNMNM6.0%23.3%High36.0%0.64x0.17x0.17x10.6x3.8xNA6.0%23.3%Median24.3%0.35x0.17x0.17x9.7x3.8xNA2.8%4.0%Mean22.6%0.35x0.17x0.17x7.9x3.8xNA3.1%5.3%Low5.8%0.06x0.17x0.17x3.4x3.8xNA0.6%(10.1)%Atari,Inc.$1.5039.2%$20.2$28.80.31x0.38x0.40xNMNMNMNM(34.4)%Source:SECfilingsandotherpubliclyavailableinformation.STRICTLYCONFIDENTIAL

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SelectedPublicCompanyAnalysisPubliclyTradedCompanyAnalysisConclusionDuff&PhelpscalculatedanimpliedenterprisevalueofAtaribyutilizingtheenterprisevaluemultiplesofselectedPackagedMediaDistributors.Thesestepsyieldedapershareequityvaluerangeof$0.38to$1.75.GiventheCompanysdecisiontoreduceitsinvolvementinthedevelopmentofgames,analysisofselectedvideogamedevelopers,publishersanddistributorswasdeemedtobelessrelevant.EBITDAmultiplesarenotapplicableinthissituationasAtarihasnegativeEBITDAfortheLTMperiod.Atari,Inc.SelectedPublicCompanyAnalysis($in000sexceptEquityValuePerShareOutstanding)MultiplesSelectedEnterpriseValuePerformanceMeasureAtariLowMedianHighMultipleRangeRangePackagedMediaDistributorsLTMRevenue1$91.80.06x0.35x0.64x0.15x0.35x$13.8$32.1EnterpriseValueRange$13.8$32.1Less:NetDebt2$8.6$8.6TotalEquityValue$5.2$23.5EquityValuePerShareOustanding3$0.38$1.751LatesttwelvemonthsasofDecember31,20072Netdebtcalculatedby
deductingcashandequivalents($5.4million)fromthe$14millioncreditfacilityonAtarisbalancesheetasofDecember31,20073AsofDecember31,2007,Atarihad13,477,920sharesoutstandingSTRICTLYCONFIDENTIAL

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V.SelectedM&ATransactionAnalysis(ValuationMultiples)STRICTLYCONFIDENTIAL

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SelectedM&ATransactionAnalysis(ValuationMultiples)SelectedM&ATransactionAnalysisMethodologyDuff&PhelpsselectedM&AtransactionsinvolvingtargetcompaniesthatDuff&Phelpsdeterminedtoberelevanttoitsanalysis.Duff&PhelpscomputedtheLTMrevenuesandEBITDAforeachofthetargetcompanies.Duff&PhelpsthencalculatedtheimpliedenterprisevalueforeachtransactiontothetargetsrespectiveLTMrevenueandEBITDAandcomparedthemultiplesoftheselectedtransactionstothemultiplesimpliedintheProposedTransaction.Duff&Phelpsrestrictedthesearchtoincludeonlytransactionswithenterprisevalueslessthan$500million.Duff&Phelpsusedthefollowingmethodologyinselectingrelevantcomparabletransactions:PrimaryandSecondarySICCodes:7372(prepackagedsoftware),5045(computersandcomputerPeripheralequipmentandsoftware)and7822(motionpictureandvideotapedistribution).Duff&Phelpsreviewedthetransactionhistoriesofrelevantcomparablecompanies.Becauseofalimitedsamplesize,Duff&PhelpsincludetransactionsinvolvingforeigntargetsaswellasU.S.basedtargets.
Duff&Phelpsultimatelyselected8precedenttransactionsfallingundertwocategories:VideoGameDevelopers,PublishersandDistributorsPackagedMediaDistributorsNoneofthetransactionsutilizedforcomparativepurposesinthefollowinganalysisis,ofcourse,identicaltotheProposedTransaction.Accordingly,acompletevaluationanalysiscannotbelimitedtoaquantitativereviewoftheselectedtransactionsandinvolvescomplexconsiderationsandjudgments.STRICTLYCONFIDENTIAL

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SelectedM&ATransactionAnalysis(ValuationMultiples)SelectedM&ATransactionsAnalysisSelectedPrecedentTransactionsSELECTEDCOMPARABLETRANSACTIONSVIDEOGAMEDEVELOPERS,PUBLISHERSANDDISTRIBUTORSEnterpriseValueasLTMDateAcquirorNameEnterpriseaMultipleofLTM:EBITDAAnnouncedTargetNameTargetBusinessDescriptionValueRevenueEBITDAMargin6/14/2007EntertainmentOneLtd.(AIM:ETO)EngagesintheacquisitionandexploitationofDVDdistributionrightsfromthirdparty$98.82.00x8.0x25.1%ContenderEntertainmentGroupproducersintheUnitedKingdom.7/25/2006MattelInc.(NYSE:MAT)Engagesinthedevelopment,manufacture,anddistributionofelectronicentertainment$185.81.25x15.6x8.0%RadicaGamesLtd.productsincludingelectronicgames,videogamecontrollersandaccessories.3/17/2006ElectronicArtsInc.(NasdaqNM:ERTS)Developsgamesforpersonalcomputersandgameconsolesforthetelevisionandcomputer$45.01.52x5.3x28.7%DigitalIllusionsCEABgamesmarketsworldwide.9/3/2003TakeTwo
InteractiveSoftware,Inc.Engagesindeveloping,publishing,distributing,andmarketinginteractiveentertainment$42.61.02x7.7x13.3%TDKMediactive,Inc.softwarebasedonintellectualcontent.4/24/2002Atari,Inc.(NasdaqNM:ATAR)Developsinteractivevideogamesandcreatestitlesforpersonalcomputersandvideogame$47.08.11x28.5x28.4%ShinyEntertainment,Inc.consoles.Median1.52x8.0x25.1%Mean2.78x13.0x20.7%SELECTEDCOMPARABLETRANSACTIONSPACKAGEDMEDIADISTRIBUTORSEnterpriseValueasLTMDateAcquirorNameEnterpriseaMultipleofLTM:EBITDAAnnouncedTargetNameTargetBusinessDescriptionValueRevenueEBITDAMargin5/9/2007PeaceArchEntertainment(AMEX:PAE)OperatesasadigitalversatilediscdistributorintheUnitedStates.Itslibraryincludesgenre$10.00.53xNANATrinityHomeEntertainment,LLCclassics,andbudgetandfirstrunfeaturefilms.2/14/2007MarwynInvestmentManagementLLPOwnsanddistributesfilmandentertainmentcontentinternationallyandengagesin$150.50.33x6.9x4.8%
EntertainmentOneLtd.wholesalingandspecialtyretailinghomeentertainmentproducts.10/20/2005HandlemanCo.(NYSE:HDL)Engagesinpublishinganddistributinginteractiveentertainmentsoftwareforvideogame$112.00.43x4.8x9.1%CraveEntertainmentGroup,Inc.platformswithtitlesincludingaction/adventure,firstpersonshooterandsportsgames.Median0.43x5.9x6.9%Mean0.43x5.9x6.9%Source:SECfilings,CapitalIQFactsetMergerstat,Bloombergandotherpubliclyavailableinformation.STRICTLYCONFIDENTIAL

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SelectedM&ATransactionAnalysis(ValuationMultiples)SelectedM&ATransactionAnalysisConclusionDuff&PhelpscalculatedanimpliedenterprisevalueofAtaribyutilizingtheenterprisevaluemultiplesofselectedtransactionsinwhichthetargetwasapackagedmediadistributor.Thesestepsyieldedapershareequityvaluerangeof$0.72to$1.41.GiventheCompanysdecisiontoreduceitsinvolvementinthedevelopmentofgames,analysisofselectedtransactionsinvolvingvideogamedevelopers,publishersanddistributorswasdeemedtobelessrelevant.EBITDAmultiplesarenotapplicableinthissituationasAtarihasnegativeEBITDAfortheLTMperiod.Atari,Inc.SelectedM&ATransactionAnalysis($in000sexceptEquityValuePerShareOutstanding)Atari,Inc.MultiplesSelectedEnterpriseValuePerformanceMeasureLowMedianHighMultipleRangeRangePackagedMediaDistributorsLTMRevenue1$91.80.33x0.43x0.53x0.20x0.30x$18.4$27.5EnterpriseValueRange$18.4$27.5Less:NetDebt2$8.6$8.6TotalEquityValue$9.8$18.9EquityValuePerShareOustanding3$0.72
$1.411LatesttwelvemonthsasofDecember31,20072Netdebtcalculatedbydeductingcashandequivalents($5.4million)fromthe$14millioncreditfacilityonAtarisbalancesheetasofDecember31,20073AsofDecember31,2007,Atarihad13,477,920sharesoutstandingSTRICTLYCONFIDENTIAL

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VI.SelectedM&ATransactionAnalysis(PremiumsPaid)STRICTLYCONFIDENTIAL

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SelectedM&ATransactionAnalysis(PremiumsPaid)SummaryPremiumsPaidAnalysisDuff&Phelpsreviewedthepremiumspaidovermarketpricefor26publictoprivatetransactionsannouncedfromJanuary1,2003throughApril22,2008inwhichthemajorityshareholderacquiredtheremainingoutstandingminoritysharesinaU.S.publiclytradedcompany.Ineachcase,thetransactioninvolvesatleast10%oftheoutstandingshares.Duff&Phelpsalsoreviewedthetransactionpremiumspaidovermarketpricefor36publictoprivatetransactionsofaU.S.publiclytradedcompanyannouncedfromOctober1,2007throughApril22,2008.Thesetransactionsinvolvedanacquisitionof100%oftheoutstandingsharesorsituationsinwhichtheacquirorheldaminorityandacquiredthemajorityoftheoutstandingshares.Inaddition,Duff&Phelpsanalyzedpremiumspaidinsituationsinwhichthetargetbusinesswasdeemedtobedistressed(definedtobesituationsinwhichthetargetcompanyhadanegativeEBITDAmargin).Duff&Phelpscomparedthepremiumsoverthe1day,5day,and30daytradingpricepriortotheannouncementofsuchpublictoprivate
transactiontotheimpliedpremiumassociatedwiththeProposedTransaction.SUMMARYPREMIUMSPAIDANALYSISUSTARGETSMajorityShareholderPurchasesPublictoPrivateTransactionsintheMajorityShareholderPurchasesPublictoPrivateTransactionsintheRemainingOutstandingSharesLastSixMonthsRemainingOutstandingSharesLastSixMonths(DistressedSituations)(DistressedSituations)1DayPrem.5DayPrem.30DayPrem.1DayPrem.5DayPrem.30DayPrem.1DayPrem.5DayPrem.30DayPrem.1DayPrem.5DayPrem.30DayPrem.NumberofTransactions262626111111363636131313OverallMedian25.8%23.7%34.1%29.1%25.9%41.3%30.8%27.3%32.4%31.6%26.8%27.9%OverallMean28.4%29.1%34.6%25.0%26.7%38.1%40.7%42.4%38.8%41.2%37.6%30.1%Source:MergerstatNote:MajoritybuyingminoritytransactiondatesfromJanuary2003topresentandminoritybuyingpublictoprivatetransactionsrangefromOctober2007topresentSTRICTLYCONFIDENTIAL

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SelectedM&ATransactionAnalysis(PremiumsPaid)PremiumsPaidSummaryofMajorityShareholderPurchasesRemainingOutstandingSharesPREMIUMSPAIDANALYSISPUBLICTOPRIVATETRANSACTIONSWITHUSTARGETS(MAJORITYSHAREHOLDERPURCHASESREMAININGOUTSTANDINGSHARES)ByEnterpriseValuesinceJanuary2003($inmillions)NumberofMedianEnterpriseMedianPremiumOneDayBeforeMedianPremiumFiveDaysBeforeMedianPremium30DaysBeforeEnterpriseValueMedianLTMRevenueMedianLTMEBITDATransactionsValueAnnouncementDate(%)AnnouncementDate(%)AnnouncementDate(%)$1Bil5$3,167.4$1,856.4$433.525.6%22.9%15.4%$100Mil$1Bil7$189.6$146.2($9.2)29.1%25.9%41.3%$50Mil$100Mil5$56.4$68.6$2.222.5%21.9%30.3%$10Mil$50Mil9$19.7$40.7$2.035.3%33.3%52.8%OVERALLMEDIAN26$73.4$116.9$2.325.8%23.7%34.1%OVERALLMEAN28.4%29.1%34.6%Atari,Inc.0.0%6.3%58.5%Source:MergerstatSTRICTLYCONFIDENTIAL

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SelectedM&ATransactionAnalysis(PremiumsPaid)PremiumsPaidMajorityShareholderPurchasesRemainingOutstandingShares(January1,2003Current)Announced%ofShares1Day5Day30DayEnterpriseDateTargetBuyerAcquiredPremiumPremiumPremiumValue2Aug04CoxCommunications,Inc.CoxEnterprises,Inc.38.4%26.0%24.6%15.4%$27,378.010Mar08NationwideFinancialServices,Inc.NationwideMutualInsuranceCo.33.5%24.4%16.2%19.2%8,311.524Aug07HearstArgyleTelevision,Inc.TheHearstCorp.25.7%14.9%14.9%(0.7%)3,167.45Nov07AlfaCorp.AlfaMutualInsuranceCo.46.1%25.6%22.9%19.5%1,844.317Mar06WilliamLyonHomesWilliamLyonHomes,Inc.25.5%44.0%50.5%7.7%1,563.216Jun06CasePomeroy&Co.CPNewco,Inc.14.0%5.2%6.0%6.8%291.22Dec05FoodaramaSupermarkets,Inc.TheSakerFamilyCorp.49.0%40.5%35.1%38.7%251.518Jan08DominionHomes,Inc.DominionHomes,Inc.35.8%41.3%35.4%41.3%210.08Jul05CruzanInternational,Inc.V&SVin&SpritAB36.4%12.4%9.1%103.5%189.66Nov06MoscowCableCorp.
RenovaGroupofCos.19.0%29.1%25.9%42.5%159.730Jun06TIMCOAviationServices,Inc.LJHLtd.10.9%56.9%97.0%61.3%125.513Jun03AtalantaSosnoffCapitalLLCAtalantaSosnoffCapitalCorp.17.3%0.4%6.7%12.5%116.55May03SemeleGroup,Inc.SemeleGroup,Inc.46.9%25.0%25.0%21.2%78.529Jul03JanusHotels&Resorts,Inc.JanusAcquisition,Inc.29.6%(5.8%)(4.4%)(13.3%)68.37Jul05ObsidianEnterprises,Inc.ObsidianEnterprisesInc22.7%37.0%27.6%44.5%56.45Apr04MinutemanInternational,Inc.HakoWerkeGmbH32.0%22.5%21.9%30.3%55.21Aug03OAOTechnologySolutions,Inc.TerrapinPartnersLLC49.0%15.0%10.9%50.0%55.231Dec03BoydBros.Transportation,Inc.BBTAcquistionCorp.28.0%53.0%63.9%97.4%47.420Nov06HanoverDirect,Inc.ChelseyDirectLLC31.5%(79.2%)(80.0%)(79.3%)37.913Sep04RagShops,Inc.SunCapitalPartners,Inc.44.3%23.2%17.2%37.8%22.227Jan04DoverInvestmentsCorp.LawrenceWeissbergRevocableLivingTrust48.7%35.3%11.8%14.7%22.02Dec03ReedsJewelers,Inc.SparkleLLC12.5%88.1%94.3%
95.2%19.720Dec04ElmersRestaurants,Inc.ERIAcquisitionCorp.41.1%(0.7%)(0.5%)0.0%16.819Feb03RiversideGroup,Inc.RiversideGroup,Inc.43.0%33.3%33.3%60.0%14.02Dec03KontronMobileComputing,Inc.KontronEmbeddedComputersAG48.5%52.8%71.9%52.8%13.521Nov03ChefsInternational,Inc.LombardiRestaurantGroupInc38.7%118.9%118.9%121.3%12.3High118.9%118.9%121.3%Median25.8%23.7%34.1%Mean28.4%29.1%34.6%Low(79.2%)(80.0%)(79.3%)Source:MergerstatSTRICTLYCONFIDENTIAL

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SelectedM&ATransactionAnalysis(PremiumsPaid)PremiumsPaidSummaryofMajorityShareholderPurchasesRemainingOutstandingShares(Distressed)PREMIUMSPAIDANALYSISDISTRESSEDPUBLICTOPRIVATETRANSACTIONS(MAJORITYSHAREHOLDERPURCHASESREMAININGOUTSTANDINGSHARES)ByEnterpriseValuesinceJanuary2003($inmillions)NumberofMedianEnterpriseMedianPremiumOneDayBeforeMedianPremiumFiveDaysBeforeMedianPremium30DaysBeforeEnterpriseValueMedianLTMRevenueMedianLTMEBITDATransactionsValueAnnouncementDate(%)AnnouncementDate(%)AnnouncementDate(%)$1Bil0NANANANANANA$100Mil$1Bil6$174.7$146.2($9.2)34.8%30.5%41.9%$50Mil$100Mil2$67.5$43.9($2.7)31.0%26.3%32.9%$10Mil$50Mil3$22.2$116.9$1.723.2%17.2%37.8%OVERALLMEDIAN11$116.5$116.9($0.5)29.1%25.9%41.3%OVERALLMEAN25.0%26.7%38.1%Atari,Inc.0.0%6.3%58.5%Source:MergerstatNote:Adistressedtargetwasdeemedtobea
businesswithEBITDAmarginsatorbelowzero.STRICTLYCONFIDENTIAL

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SelectedM&ATransactionAnalysis(PremiumsPaid)PremiumsPaidMajorityShareholderPurchasesRemainingOutstandingShares(Distressed)(January1,2003Current)Announced%ofShares1Day5Day30DayEnterpriseDateTargetBuyerAcquiredPremiumPremiumPremiumValue2Dec05FoodaramaSupermarkets,Inc.TheSakerFamilyCorp.49.0%40.5%35.1%38.7%$251.518Jan08DominionHomes,Inc.DominionHomes,Inc.35.8%41.3%35.4%41.3%210.08Jul05CruzanInternational,Inc.V&SVin&SpritAB36.4%12.4%9.1%103.5%189.66Nov06MoscowCableCorp.RenovaGroupofCos.19.0%29.1%25.9%42.5%159.730Jun06TIMCOAviationServices,Inc.LJHLtd.10.9%56.9%97.0%61.3%125.513Jun03AtalantaSosnoffCapitalLLCAtalantaSosnoffCapitalCorp.17.3%0.4%6.7%12.5%116.55May03SemeleGroup,Inc.SemeleGroup,Inc.46.9%25.0%25.0%21.2%78.57Jul05ObsidianEnterprises,Inc.ObsidianEnterprisesInc22.7%37.0%27.6%44.5%56.420Nov06HanoverDirect,Inc.ChelseyDirectLLC31.5%(79.2%)(80.0%)(79.3%)37.913Sep04RagShops,Inc.SunCapital
Partners,Inc.44.3%23.2%17.2%37.8%22.22Dec03ReedsJewelers,Inc.SparkleLLC12.5%88.1%94.3%95.2%19.7High88.1%97.0%103.5%Median29.1%25.9%41.3%Mean25.0%26.7%38.1%Low(79.2%)(80.0%)(79.3%)Source:MergerstatNote:AdistressedtargetwasdeemedtobeabusinesswithEBITDAmarginsatorbelowzero.STRICTLYCONFIDENTIAL

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SelectedM&ATransactionAnalysis(PremiumsPaid)ConclusionMajorityShareholderPurchasesRemainingOutstandingSharesInreviewingthe26transactionsinwhichthemajorityshareholderpurchasedtheremainingoutstandingsharesofapubliclytradedsubsidiary,Duff&Phelpsobservedthemeanandmedianofthepremiumspaidoverthe1day,5dayand30daytradingpricepriortoannouncement.1DayPremium5DayPremium30DayPremiumMedian25.8%23.7%34.1%Mean28.4%29.1%34.6%StandardDeviation0.3400.3780.408Inreviewingthe11distressedtransactionsinwhichthemajorityshareholderpurchasedtheremainingoutstandingsharesofapubliclytradedsubsidiary,Duff&Phelpsobservedthemeanandmedianofthepremiumspaidoverthe1day,5dayand30daytradingpricepriortoannouncement.1DayPremium5DayPremium30DayPremiumMedian29.1%25.9%41.3%Mean25.0%26.7%38.1%StandardDeviation0.3960.4460.456ThePerShareCashConsiderationintheProposedTransactionrepresentsa1day,5dayand30daypremiumof0.0%,6.3%and58.5%,respectively.Therelevanceofthepremiumspaid
analysisislimitedbytheCompanysdependenceonIESA,themajorityshareholderintheCompany,fornewreleaseproduct.STRICTLYCONFIDENTIAL

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VII.NetAssetValueAnalysisSTRICTLYCONFIDENTIAL

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NetAssetValueAnalysisCalculationofNetAssetValueDuff&PhelpsreviewedAtarisDecember31,2007balancesheetaswellastheCompanysestimatedinternalMarch31,2008tocalculatethenetassetvalue(NAV)oftheCompany.AsofDecember31,2007,Ataristotalassetsandtotalliabilitieswere$43.5millionand$60.3million,respectively,foraNAVofnegative$16.8millionEstimatedasofMarch31,2008,Ataristotalassetsandtotalliabilitieswere$32.6millionand$52.9million,respectively,foraNAVofnegative$20.3millionAtari,Inc.BalanceSheetSummary($inmillions)December31,March31,20072008(Estimated)Cash$5.4$10.0Receivables,net16.2(0.3)Inventories7.46.5PrepaidExpensesandOtherCurrentAssets6.07.7TotalCurrentAssets34.924.0NetProperty,Plant&Equipment6.36.4GoodwillandIntangiblesOtherLongTermAssets2.22.1TotalAssets$43.5$32.6AccountsPayable$10.6$9.7AccruedLiabilities11.56.8RoyaltiesPayable3.82.7CreditFacility14.014.0DuetoRelatedParties5.32.7OtherCurrentLiabilities0.9TotalCurrentLiabilities45.236.8DuetoRelatedParties,LongTerm3.03.6
LongTermDeferredRent6.77.1RelatedPartyLicenseAdvance5.15.4OtherLongTermLiabilities0.3TotalLiabilities60.352.9StockholdersEquity(16.8)(20.3)TotalLiabilities&StockholdersEquity$43.5$32.6Source:CompanySECFilings,ManagementEstimatesSource:SECfilingsSTRICTLYCONFIDENTIAL

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VIII.LiquidationAnalysisSTRICTLYCONFIDENTIAL

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LiquidationAnalysisSummaryofLiquidationAnalysisDuff&PhelpspreparedaliquidationanalysisassuminganorderlyliquidationinwhichtheCompanywouldrealize70%ofbookvalueforaccountsreceivable,50%bookvalueforinventoryand70%bookvalueforproperty,plantandequipment.Tothisamount,weaddedthebookvalueofcashandmarketablesecurities.Additionally,Atariownscertainintellectualpropertythatisnotreflectedonthebalancesheet.Inaliquidationscenario,weassumedthattheCompanywouldrealize100%oftheestimatedfairmarketvalueoftheIP.A25%discountforbankruptcycostswasappliedandtheresultingvaluewasdiscountedbackoneandonehalfyearstopresentvalueata20%discountratetoadjustforthetimeperiodrequiredtocompletetheliquidation.STRICTLYCONFIDENTIAL

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LiquidationAnalysisLiquidationAnalysisInaliquidationscenario,thevalueofthecommonstockwouldbezero.Atari,Inc.LiquidationAnalysis($inmillion)EstimatedEstimatedLiquidationBookValueRecoveryValueCash$5.4100%$5.4AccountsReceivable16.870%11.8Inventory7.450%3.7NetPP&E6.370%4.4IntellectualProperty(1)13.3100%13.3Total38.5Less:BankruptcyCosts@25%(2)9.6NetTotal28.9Less:DiscountFactor(3)0.7607TotalLiquidationValue22.0AtariLiabilities60.3LiquidationValueAvailabletoCommonShareholders($38.3)Notes:(1)EstimatedvalueofAtarisintellectualproperty,basedonOceanTomoanalysisasofJanuary1,2007.Appliedthemidpointoftherangeofvalue($17.0millionto$29.9million)indicated.TherightstoTestDrivewerelicensedtoIESAfor$5.0millioninNovember2007,therefore,theestimatedvalueofTestDrive($10millionto$15million)wassubtracted.Thelicenseagreementisforasevenyearterm,therefore,itwasassumedthatnoresidualvaluerelatedtotheTestDriveIPexists.(2)Estimatedliquidation/bankruptcycosts.(3)Discountfactorof20%overa1.5year
period.STRICTLYCONFIDENTIAL

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