Why the Atlus Restructuring Is More Awesome than You Think

Sega has announced that Index Corporation, which used to own Atlus on its own before Index was bought by Sega, will now be called Atlus. Meanwhile, part of Atlus will be called Index, and the former Index Digial Media will now be known as Atlus USA. Sound confusing? You bet!

This announcement, shuffling legal identities to “maximize the creation of synergies within Sega Sammy, as well as within each industry of the Sega Group” doesn’t seem too exciting on its surface, but I think the name-switching confusion masks the fact that someone’s about to end up with a shiv between their ribs.

Let’s Play: Hypothetical Game Dev Tycoon

Pretend you’re in charge of a software company. Let’s call it Shmega.

One day, you notice that a rival, call them Shatlus, is about to go bankrupt. Shatlus owns the rights to a few software titles that could make money, but they also have too many outstanding debts to pay off without help. That’s not a complete loss! When you compare it to Curt Schilling’s game company, which borrowed $75 million and only produced one game, it looks like Shatlus ended up with a tie.

As Shmega, you step in and buy Shatlus. You’re going to wring some money out of its corporate husk, which you’ll do by restructuring. Two new companies shall arise from the ashes of their predecessor.

One new company, Bratlus, will be treated as the firstborn. It gets the rights to the games that Shatlus created, along with anything else you want to keep. There are great things in store for Bratlus. 

The other company, Splatlus, ends up holding all of the liabilities of its former parent. (It’s going to go splat.)

Shmega’s fortunes will be closely linked to the ongoing success of Bratlus. Splatlus, not so much. For all you care, Splatlus will end up, as Matt Levine might put it, “cast into the fires of Mount Doom.”

Back in the real world, we’re left wondering whether Sega is doing something similar with Atlus and Index Corporation. Did you notice that a managing director from Sega is in charge of New Atlus, while New Index is being run by someone from Old Index?

If Old Index was run by people who could were good at avoiding bankruptcy, they wouldn’t have been bought by Sega. Just sayin’.

But both companies could stick around for a while. Michael Woodford, former CEO of Olympus, has previously complained about the way that companies all over the world are allowed to fail, while “in Japan there can be no failure in the system.” According to Woodford, Japan’s country club mentality allows artificial measures, like additional loans that have no hope of being repaid, to keep bad enterprises afloat long past their expiration date.

And this restructuring could be entirely aboveboard. Maybe the press release should be taken at face value! Or maybe these maneuvers, the similar-sounding company names, and the overlapping areas of responsibility are designed to stir up confusion so that nobody realizes they’ve been left holding the bag until it’s too late to do anything about it.

About B. Indifferent

Bitterly Indifferent is a belligerent hillbilly with a substandard internet connection. He is also a fan of retro gaming who has previously written about the state of games journalism and the intersection of games and family.