Atari Owns 53% of Polymega's Maker, Won't Put It on Its Books, and Just Booked a Write-Down on It

Excerpt: Atari SA's audited annual report for the year ended March 31, 2026 lists Playmaji — the Los Angeles company that makes the Polymega, the only game console ever assembled in Myanmar — as a 53%-owned "non-consolidated entity," and books a €1.9 million impairment that names Playmaji among the minority holdings it wrote down. The brand that markets the Polymega does not carry the console in its own accounts.

A primary-document reading of Atari SA's FY2025-2026 Annual Report (results announced August 3, 2026; board approval August 2, 2026), read as filed. Sources below include the report itself, Playmaji's own filings, and the Highway Holdings contract-manufacturer filings this desk read yesterday. Every figure, date and quotation below is taken from those documents or named sources.

The short version

The Polymega is a $500-plus modular retro console sold by Playmaji, Inc. Yesterday this desk reported, from the contract manufacturer's own SEC filings, that the machine had been assembled in Yangon, Myanmar and that the assembly line and tooling were quietly moved back to China in early 2026. That story was told from the factory side.

There is a brand side to the same company, and it was disclosed in the same window, and nobody joined the two halves together: Atari SA — the French (now Luxembourg) company that owns the Atari brand — owns 53% of Playmaji. It says so itself, in its audited accounts. And in those same accounts, for the year ended March 31, 2026, Atari does not consolidate Playmaji. It files the company under a heading called "non-consolidated entities," carries it as an equity investment, and includes Playmaji among the holdings on which it booked a write-down.

The Atari annual report is a small library's worth of disclosures. The Polymega disclosure is a handful of lines inside it. But it is the other half of a story that has been running all year: the console that the supply chain quietly abandoned, and the brand owner that quietly marked its stake down.

What the annual report says, in its own words

Atari's FY2025-2026 Annual Report contains a scope-of-consolidation table. Under the subheading "Non-consolidated entities," it lists three companies:

A footnote to that table states the arrangement precisely:

"Atari holds a non-controlling stake of 53% on a non-diluted basis and 49% on a fully diluted basis. Atari does not control the majority of the Board of Directors nor the operational decisions of the business."

That is the whole thesis of the accounting, in two sentences: a majority economic stake that, in Atari's own reading, is not control — so it is not consolidated.

The write-down appears in the note on financial assets. Atari's investments measured at fair value through other comprehensive income fell from €11.6 million at March 31, 2025 to €9.9 million at March 31, 2026. The report attributes the decline directly:

"The decline reflects impairments of €1.9M, net, recognized on certain minority investments (Playmaji, Antstream, and Worldwinner / GameTaco), partially offset by an increase in the value of other securities held."

Playmaji is named first among the three holdings whose carrying value was cut. Read plainly: in the year the Polymega's assembly line left Myanmar and restarted in China, Atari marked its stake in the console's maker down.

There is a second Playmaji line in the accounts. Under "Investments / Note receivable," the report discloses that Atari holds convertible notes receivable from Playmaji of $0.5 million, measured at amortized cost and classed as Level 3 in the fair-value hierarchy — meaning a valuation built on unobservable inputs, "based on estimates, in relation also to the estimated value of the initial investment into the company."

The number that explains the sentence

Why would a 53% owner not consolidate the company? The answer is in the footnote itself, and it is a live question in accounting, not a clerical omission.

Under IFRS, majority ownership of the shares is not the test. Control is. An investor consolidates an entity when it has power over the relevant activities, exposure to variable returns, and the ability to use that power to affect those returns. Atari's footnote says the third element is missing: "Atari does not control the majority of the Board of Directors nor the operational decisions of the business."

That is a strong claim for an owner of a majority of the equity. It means Playmaji's board and management run the company, and Atari's 53% is economic exposure without operational control — closer to a large passive stake than a subsidiary. So the Polymega's revenues, its costs, its Myanmar-to-China manufacturing saga and its recent price rise never appear as Atari's own. They appear, if at all, as the fair value of an investment Atari has now partly written off.

The report also frames the exposure as a risk item, at a deliberately modest level. Among Atari's principal risk factors, the one titled "Risk associated with equity participations" is rated Moderate — with the company noting it "has in recent years conducted several minority investments in video game and innovative hardware development companies to support their development strategies."

The same company, the other half of the story

The Polymega is the only video game console known to have been assembled in Myanmar. That was established yesterday from the filings of Highway Holdings Limited (Nasdaq: HIHO), the Hong Kong-headquartered contract manufacturer that built it. Highway Holdings' fiscal 2026 shareholder letter, furnished to the SEC on September 28, 2026, said the company "restarted our game console manufacturing business, which previously ran production out of our Myanmar factory," after shipping "most of the material and necessary assembly tools back to our factory in China," with production starting "in early of February" 2026.

That account came entirely from the maker's side — the factory, not the brand. What the Atari report adds is the owner's side, and it lands in the same reporting window. The chain now reads:

• Brand/marketer: Playmaji, Inc. (Los Angeles), maker of the Polymega.
• Majority shareholder: Atari SA, at 53% non-diluted / 49% fully diluted — disclosed in Atari's FY2025-2026 annual report, results announced August 3, 2026.
• Contract manufacturer: Highway Holdings Limited, which built the console in Myanmar and moved the line to China in early 2026 — disclosed in HIHO's September 28, 2026 shareholder letter.
• The owner's accounting treatment of all of it: a non-consolidated investment, now impaired.

Three separate primary sources, three separate filings, one company — and the only one an Atari or Polymega customer is likely to read, the brand's own, is the one that treats the console as a line item rather than a business.

Atari's own hardware is up; the one console it half-owns is impaired

The contrast inside Atari's own results is the part that will matter to anyone tracking retro-hardware economics.

Atari's own hardware business grew sharply in FY26. Hardware revenue rose to €7.3 million from €4.0 million a year earlier, an 83% increase, "primarily driven by the sales of the Atari 2600+/7800+ PAC-MAN Edition, Intellivision Sprint" and related cartridge and controller products. That is the "Atari Plus" retro ecosystem — the 2600+ and 7800+ consoles, the CX40+ joystick, the Intellivision Sprint released in December 2025, and a growing catalogue of physical cartridges.

But read how Atari describes the business model behind that hardware, because it is not a manufacturing business:

"Atari develops its hardware product roadmap primarily through strategic partnerships and licenses with third parties, and continues to expand both direct and retail distribution to new geographies."

And, on the licensing side:

"…strategic partnerships with third parties which manufacture hardware and distribute products in exchange for paying royalties to Atari under multi-year agreements."

The named partners are licensing counterparties, not factories Atari owns: the 2600+ PAC-MAN Edition was "produced in partnership with Bandai Namco"; the handheld and plug-and-play lines arrive via partners such as My Arcade / Dreamgear (the Atari Gamestation Go portable and Atari Gamestation Mega), with the My Play Watch and a tabletop arcade cabinet line following the same template.

So the structure of Atari's retro-hardware business is: license the brand, let a third party build and distribute, collect royalties. The company carries almost no manufacturing risk and almost no inventory on its own book for these products. The one place Atari holds a direct, majority equity stake in an actual console manufacturer — Playmaji, which makes and sells a console itself — is the piece that just went through an impairment.

Atari does not say the write-down is because of the Myanmar move, and its accounts do not attribute the €1.9 million to Playmaji alone (the figure is "net," across three holdings). But the timing is the timing: the console's production retreat and its owner's markdown were disclosed within weeks of each other, for the same fiscal year.

The rest of the year: Luxembourg, a reverse split, and 12% money

The Playmaji disclosure sits inside a year in which Atari restructured its own corporate shell.

On February 17, 2026, Atari announced it would transfer its registered office from France to Luxembourg "by way of a cross-border conversion into a Luxembourg société anonyme." Shareholders approved the move on May 27, 2026. Atari announced the completion on July 7, 2026, and the report records that the company "was migrated to Luxembourg on July 6, 2026," now domiciled at 8-10, avenue de la Gare, L-1610 Luxembourg. The old French entity was registered in Paris under number 341 699 106.

In parallel, Atari executed a reverse stock split. It set the terms in March 2026 — consolidating 200 existing shares of €0.01 par into one new share of €2.00 — and completed it on May 5, 2026. Post-split, share capital is €5,833,616, represented by 2,916,808 shares of €2.00 par. A reverse split of that ratio (200:1) is the kind of step a company takes to restore a "normal number of shares outstanding" on a market — the report's own framing — rather than to reward holders.

And the money is expensive. Since the fiscal year end, Atari says a total of €53.0 million in new loans was concluded with IRATA LLC, the holding company of Atari chairman and CEO Wade Rosen — including $14 million tied to the Hipster Whale acquisition and €29.3 million to repay outstanding convertible bonds. When those bonds matured on July 31, 2026, IRATA declined to convert, and the repayment was financed by a fresh IRATA loan: €29.3 million, three-year maturity, 12% annual interest, with optional convertible features at a €24.00 per-share floor. The report is explicit that the going-concern assessment rests on the principal shareholder's support: Atari "considers it can meet its obligations and that it can continue its activities over the next 12 months with the support of its main shareholder IRATA LLC."

Set against that, Atari's headline numbers are genuinely strong: consolidated revenue of €56.0 million, up about 66%, which the report calls its "third consecutive year of revenue growth and highest revenue levels in more than a decade." But the group still ran a net loss of €4.8 million, carries a net debt position of −€77.6 million, and closed the year with consolidated equity of €3.0 million. The profitable-looking growth is real; so is the leverage funding it.

What was verified, and what was not

Confirmed from primary filings:

• Atari SA's FY2025-2026 Annual Report lists Playmaji Inc under "Non-consolidated entities" at 53% ownership, identical across the FY26 and FY25 columns. (Atari SA FY2025-2026 Annual Report.)
• The report's footnote: Atari "holds a non-controlling stake of 53% on a non-diluted basis and 49% on a fully diluted basis. Atari does not control the majority of the Board of Directors nor the operational decisions of the business."
• The report states its FVTOCI financial assets fell from €11.6M to €9.9M at March 31, 2026, and that the decline "reflects impairments of €1.9M, net, recognized on certain minority investments (Playmaji, Antstream, and Worldwinner / GameTaco)."
• Atari holds convertible notes receivable from Playmaji of $0.5M (amortized cost; Level 3).
• Atari hardware revenue rose to €7.3M from €4.0M (+83%) in FY26; Atari develops its hardware "primarily through strategic partnerships and licenses with third parties."
• The redomiciliation (announced February 17, 2026; approved May 27, 2026; completed July 6, 2026), the reverse split (terms March 2026; completed May 5, 2026), and the €53.0M of post-year-end IRATA loans (including the €29.3M / 12% refinancing with the €24.00 floor) are all stated in the report.
• Playmaji makes the Polymega, and Highway Holdings built it in Myanmar before moving production to China in early 2026 (Highway Holdings Form 6-K, September 28, 2026; its FY2026 Form 20-F; and the company's earlier releases naming Playmaji and the Polymega).

Not confirmed / held open:

• Atari does not attribute the €1.9M impairment to Playmaji alone; the figure is a net number spread across three named holdings. The report does not publish the carrying value of the Playmaji stake on its own.
• The report does not connect the Playmaji write-down to the Myanmar-to-China production move. That the two events are related is a reasonable inference from their timing and subject matter, not a stated fact, and this article does not assert it.
• Atari's report does not state the size, date, or terms of its original Playmaji investment in the FY26 document. The 53%/49% figures have been in Atari's disclosures since at least its half-year reporting in late 2023, but this article relies only on the FY2025-2026 report for the current numbers.
• Whether Playmaji's 53% economic stake would ever be consolidated is a matter for future filings; this article reports Atari's own characterisation ("non-controlling") as filed, not an auditing conclusion.

Sources

• Atari SA — FY2025-2026 Annual Report (fiscal year ended March 31, 2026), results announced August 3, 2026; board approval August 2, 2026 — atari-investisseurs.fr (PDF). Scope-of-consolidation table, "Non-consolidated entities" (Playmaji Inc, 53%; Antstream Limited, 9%/10%; tinyBuild, 7.9%); footnote "Atari holds a non-controlling stake of 53% on a non-diluted basis and 49% on a fully diluted basis. Atari does not control the majority of the Board of Directors nor the operational decisions of the business."; financial-assets note ("decreased from €11.6M at March 31, 2025 to €9.9M at March 31, 2026 … impairments of €1.9M, net, recognized on certain minority investments (Playmaji, Antstream, and Worldwinner / GameTaco)"); "convertible notes receivable from Playmaji ($0.5M)"; hardware revenue "increased to €7.3M compared to €4.0M … an 83% increase"; redomiciliation and reverse split; IRATA financing (€53.0M new loans; €29.3M at 12% with a €24.00 floor); going-concern support from IRATA LLC.
• Atari SA — publications financières (investor document index) — atari-investisseurs.fr. Source of the FY2026 Annual Report PDF link.
• Highway Holdings Limited — Form 6-K, letter to shareholders dated September 28, 2026 (CIK 0001026785; acc. 0001213900-26-104029), Exhibit 99.2 — sec.gov. "We also restarted our game console manufacturing business, which previously ran production out of our Myanmar factory. We shipped most of the material and necessary assembly tools back to our factory in China … We finally started the production in early of February."
• Highway Holdings Limited — Form 20-F, fiscal year ended March 31, 2026 (acc. 0001213900-26-077959). "Trends and Uncertainties" and "two of the Company's major customers significantly reduced its orders for products that had been manufactured in Myanmar."
• Highway Holdings Limited — Form 6-K, July 31, 2023 — sec.gov, "Highway Holdings to Resume Full Production for Playmaji," naming "the Los Angeles-based company behind the modular multi-system game console Polymega."
• Playmaji, Inc. — Form D (CIK 0001984507) — sec.gov.
• Time Extension, December 2023, "Atari Owns Almost Half Of Polymega Maker Playmaji" — timeextension.com. Quoting Atari's own wording: "a non-controlling stake of 53% on a non-diluted basis." (Contemporaneous reporting; used here only to date the wording, which this article otherwise cites from the FY2026 report.)
• GamesIndustry.biz, July 2023, "Atari makes minority investment into Playmaji" — gamesindustry.biz.
• Destructoid, "Atari investor report clarifies its stake in Polymega creator Playmaji" — destructoid.com.
• Polymega (product / manufacturer description) — polymega.com; and Wikipedia, "Polymega" — en.wikipedia.org/wiki/Polymega.

Method note: the Atari FY2025-2026 Annual Report was downloaded from Atari's investor-relations site as a PDF and read as filed (text extracted with pdftotext); the quotations above are verbatim, with the report's own column-merge artefacts corrected only where the meaning is unambiguous. Atari's report does not publish a standalone carrying value for the Playmaji stake, and it does not link the impairment to the Myanmar-to-China production move — both points are stated as open above rather than inferred. The Polymega identification rests on Highway Holdings' own releases naming Playmaji and the product.