The US operations of Atari have filed for bankruptcy protection.
The maker of the ground-breaking video game Pong is seeking to separate from its loss making French parent Atari SA.
Atari Inc, together with Atari Interactive Inc, Humongous Inc. and California US Holdings Inc. want to secure independent funding to develop digital and mobile games.
Atari said in December it was looking to raise cash and was talking to investors.
In a statement, the companies said, "with this move the US based Atari operations seek to separate from the structural financial encumbrances of their French parent holding company, Atari SA".
Atari SA, formerly known as Infogrames SA has been struggling financially for years.
The US operations of Atari have shifted their business from retail games to digital games in recent times and have become a growth engine for Atari SA.
"The Chapter 11 process constitutes the most strategic option for Atari's US operations as they look to preserve their inherent value and unlock revenue potential unrealized while under the control of Atari SA," the statement said.
Atari's Pong was an arcade game credited with helping kick-start the multi-billion pound video games industry but more recent titles include 'Centipede', 'Missile Command' and Rollercoaster Tycoon'.
Neither Atari SA or Atari Inc. were available for comment.
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