Atari, the maker of ground-breaking video games Pong and Space Invaders, has filed for bankruptcy in the US.
Atari SA, formerly Infogrames, is reported to have problems with its credit facility which is thought to be holding back the release of new games.
However Atari is likely to live on, as the move is designed to sever ties with its troubled French parent company and secure independent funding to develop more games for digital and mobile platforms.
The 40-year-old firm was one of the original gaming pioneers, producing classic titles such as Pong, Asteroids and Centipede.
The parent company, which completed its takeover of Atari in 2008, has seen its share price drop by 50% over the past year.
The US Atari operation, which is thought to employ only about 40 people, is looking to get approval for $5.25m (£3.3m) of funding and to continue business during the bankruptcy.
In a statement, Atari confirmed it would “effectuate a sale of all, or substantially all, of (its) assets” including “one of the most widely recognised brand logos, which is familiar to 90% of Americans”.
“The Chapter 11 process constitutes the most strategic option for Atari’s US operations,” it added.
In recent years, the company has moved away from traditional retail sales to making mobile and digital versions of its classic games, and licensing its logo.
Releases for iOS and Android platforms have included Atari Greatest Hits and Asteroids Gunner.
The company began life in 1972 and produced some of the earliest games consoles, including the Atari 2600.