New York's Atari Inc., one of the pioneers of the video game industry, has received a bid from its majority shareholder, Infogrames Entertainment SA, Europe's No. 3 maker of video games.

Lyon, France-based Infogrames said Friday it had delivered a letter to the U.S. company's board two days earlier offering to buy the roughly 49% of Atari that it does not already own for $1.68 per share, valuing the company at about $23 million.

Atari, which was founded in California in 1972, made its name with the launch of "Pong," the video tennis game that kick-started the console industry. Follow-up games included "Asteroids," "Missile Command," "Centipede," "Red Baron" and more recently the "Dragon Ball Z" series.

Atari has struggled recently as a result of rising development costs and of competition from larger rivals including Vivendi SA of France and Electronic Arts Inc. of Redwood City, Calif.

The group has had only one profitable quarter in almost three years and lost $70 million in fiscal 2007. Shares in the group have tumbled 65% in the past year to close Thursday at $1.66.

Infogrames said its offer was nonbinding and warned that it could pull or revise its bid. The offer represents a 1.2% premium to Atari's Thursday closing share price. Atari said that it would convene a special committee of directors and advisers to review the bid.

It is unlikely that the directors will oppose the bid after Infogrames in October stacked Atari's board with its own people, removing five of the existing board as part of a plan to stem losses at the unit. A purchase of the outstanding shares would put an end to Atari's Nasdaq listing. Infogrames listed the unit five years ago to raise money to fund its expansion in North America.

InfogrameS took control of the Atari brand in December 2000 when it bought Hasbro Interactive and Games.com from Hasbro Inc. for $100 million. - Paul Whitfield