A few weeks ago, a subsidiary of Atari announced that it was considering a port of RollerCoaster Tycoon to the Nintendo Switch, to be funded through equity investment. Not just any equity investment, but a newly available type of investment made possible by the Jumpstart Our Business Startups (JOBS) Act.

The legendary video game company, founded in 1972 by Nolan Bushnell and Ted Dabney, is synonymous with the explosive growth of arcades and titles like Pong and Missile Command. It’s equally synonymous with the collapse of the video game industry in the 1980s. So what is one of the most recognizable names in gaming doing using a crowdfunding platform intended to support entrepreneurs and startups?

Polygon reached out to Atari Game Partners, and the StartEngine platform, to find out what’s going on here.

What is StartEngine?

StartEngine was founded by Howard Marks, the co-founder of Activision and for a time the CEO of Acclaim. His new company is an equity investment platform, which operates on U.S. Securities and Exchange Commission guidelines as set down through the JOBS Act. It’s the same multipart piece of bipartisan legislation that the hybrid crowdfunding platform Fig operates under.

But, unlike Fig, which focuses on game crowdfunding, Los Angeles-based StartEngine allows for projects in just about any industry. In December, that included a pharmaceutical company, a blockchain-based “crypto asset,” probiotic health supplements, a line of men’s grooming products and an in-ear electronic translator.

In fact, despite Marks’ history in video games, the campaign for RollerCoaster Tycoon is StartEngine’s first game.

“My new mission at StartEngine is to help entrepreneurs achieve their dreams,” Marks told Polygon. “The idea is to allow the general public to invest in companies in the early stage which, for the last 80 years, they couldn’t because legislation [put in place after the Great Depression] didn’t permit it. You had to be a wealthy investor to do that. And the JOBS Act changed that.”

StartEngine is an open platform, much like Kickstarter is. Marks said it’s backstopped by a team that performs perfunctory reviews of campaigns before they go up, but by and large, anyone can create an account and start an equity campaign as long as they follow the guidelines laid out in the JOBS Act.

“The idea is to allow the general public to invest in companies in the early stage which, for the last 80 years, they couldn’t.”

Unlike Fig, there’s no advisory board to curate projects. Creators simply bring an idea with them, explain the terms of the investment and launch the campaign. If the minimum is met, the campaign succeeds and the investors’ contributions are exchanged for shares. Under the section of the JOBS Act that StartEngine operates under, the maximum that can be collected in this way is $1.07 million.

“In 2016 we did maybe 10 companies,” Marks said. “We launched about 100 last year, a little under 100, and this year we’re looking to launch multiple hundreds. And the demand for capital, as you can imagine, in this country is intense.”

However, if you look at the list of the most-funded projects on StartEngine, the one that’s earned the most money is ... StartEngine, which so far has raised more than $3.4 million.

Marks admits that’s a little bizarre.

“It is called ‘eating your own dog food’ or ‘drinking your own Kool-Aid,’” Marks said. “And it makes sense. I could go to [venture capitalists] right now. [...] I can go to VCs and raise gobbles of money. The guys who did Oculus Rift did that, right? Unbeknownst to everybody [on Kickstarter], they raised $80 million [...] and sold it for $2 billion. The backers got bupkis, right? They were not happy, by the way. But that was before the JOBS Act.”

Marks said that StartEngine is perfect for creators in the games space, because their biggest fans are often potential investors.

“There are five million small businesses in this country, and a lot of them need capital,” Marks said. “It turns out that the arts, whether it’s games or music, movies, TV, are usually having difficulties raising capital, and if they do they have to give away a lot of the rights to the publishers. And if they raise money from the general public — which is their fans, the fans of the property, fans of the designer, whatever the fans are — then they can show them the revenues, begin offering equity and share opportunities. And then the artist, the creator, can keep full control on their property. And that’s a very modern way to finance intellectual property.”

Atari Game Partners

Fred Chesnais is the CEO of Atari, a wholly owned subsidiary of Atari. He also told Polygon that he’s the largest shareholder in Atari, and that he’s partly responsible for helping to turn the company around over the last few years.

Atari has had a rocky financial history, dating all the way back to its role in the game industry crash in the 1980s. But the late 1990s and early 2000s were troubled as well. Chesnais said that he was part of the team that sold the company off to a hedge fund called BlueBay in 2007. By 2012 it was headed toward bankruptcy.

“They drove the company into the ground,” Chesnais said. He bought them out in 2013, and today Atari is profitable.

“We had €30 million of losses. €35 million of debt,” Chesnais said. “Today? No more debt. We are profitable.”

As a publisher, Chesnais said that the RollerCoaster Tycoon project will happen regardless of the success of the StartEngine campaign. The team has been contracted and a prototype has been built. But he’s not seeking equity investment purely to cater to the franchise’s fans. It’s simply a business decision.

With a stable of more than 200 gaming brands, including Pong, Centipede and Missile Command, his goal is to find inexpensive capital to drive his business.

“As a financier, because I have a portfolio of 200 games, I have a broader question,” Chesnais said, “which is, ‘What is the best way from a cost of capital perspective for Atari and for me?’”

Chesnais said that if he just used a credit card to finance RollerCoaster Tycoon, it would cost around 23 cents on the dollar. Equity crowdfunding on StartEngine simply allows him to get a better deal.

“From a strategy perspective, as a publisher, we are doing this game,” Chesnais said. “From a financial perspective and cost of capital perspective, it makes sense for Atari to try and test some new sources of funding to see if these sources could be available down the road for more games.”

In September, Atari announced that it would launch two new video game projects on Fig as well. One, according to a press release, will be a new piece of intellectual property; the other will be a reboot. There’s no word on when those projects will go live.

It may come as a surprise to fans of games to find a historic, profitable and influential name like Atari using legislation like the JOBS Act to fund its operations. The JOBS Act’s stated intention, after all, is to jumpstart business startups. It’s in the name.

But “small business” isn’t necessarily a mom-and-pop shop or a small team of game designers. In broad terms, it’s any business with fewer than 500 employees. Atari falls well within that guideline.

Nine days into the campaign for the port of RollerCoaster Tycoon to the Nintendo Switch, Atari has earned less than $39,000. It has reached its goal of $10,000, so the equity can be collected. There are currently 81 days left in the campaign.

We asked Chesnais about the odds of reaching the campaign maximum of $1.07 million.

“I don’t know,” he said. “For me, it’s irrelevant. What relevant for me is not the percentage of funding. What is relevant for me is, can crowdfunding constitute a source of financing for my portfolio of more than 200 games?”