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                                                                    Exhibit 10.8

             GT INTERACTIVE UK SETTLEMENT OF INDEBTEDNESS AGREEMENT

     AGREEMENT, dated as of September 15, 2005, between Atari UK (f/k/a
Infogrames UK) ("AUK"), and Infogrames Entertainment SA and all of its
subsidiaries (collectively, "IE") (AUK and IE are referred to herein separately,
and collectively as "IESA"), on one hand, both having an address of 1, place
Verrazzano 69252 Lyon, Cedex 09 France and Atari, Inc. ("COMPANY"), on the
other, having an address of 417 Fifth Avenue, New York, NY 10016 (the
"AGREEMENT").

     WHEREAS, in December 1999, IESA acquired a controlling interest in Company
and its wholly-owned subsidiaries. Following this acquisition, AUK, a
wholly-owned subsidiary of IESA, had paid certain expenses on behalf of GT
Interactive UK ("GTUK"), a subsidiary of Company, the operations of which were
discontinued in or about March 2000. The expense payments include amounts for
various legal functions, settlements, account fees and taxes, trade payables and
accrued liabilities;

     WHEREAS, AUK has asserted, or could assert, that Company is indebted to AUK
for payments, liabilities and obligations based on any and all matters or
circumstances arising or occurring at any time prior to or as of the date hereof
(the "GTUK INDEBTEDNESS"); and

     WHEREAS, by this Agreement, IESA and Company hereby intend to resolve all
matters of, concerning or related to the GTUK Indebtedness.

     NOW, THEREFORE, in consideration of the foregoing, the Fee and of the
mutual promises set forth herein, it is hereby agreed as follows:

     1. In full satisfaction of the GTUK Indebtedness, promptly upon the full
execution hereof, Company shall pay AUK (or its designee) 1,263,518 shares of
Company's common stock totaling in value 892,525 British pounds, each share
priced at $1.30 (the "FEE") in full and final settlement and payment of the GTUK
Indebtedness.

     2. IESA acknowledges, agrees and understands that the entire consideration
for the releases and waivers given in this Agreement is that consideration set
forth in paragraph 1 above; that said consideration is being given solely for
the purpose of settling amounts due arising out of expense reimbursements or
other amounts due and owing to AUK from Company. Any and all tax refunds or
credits associated with GTUK (including the payment of the GTUK Indebtedness)
shall be solely the property of, and inure solely to the benefit of, Company.

     3. (a) IESA does hereby relieve, release and forever discharge Company and
its predecessors, successors, representatives, employees, officers, directors
(including, without limitation, former employees, officers and directors),
shareholders, agents, employees, administrators, assigns and all affiliated,
parent and subsidiary corporations, and each of them, of and from any and all
claims, debts, liabilities, demands, obligations, promises, acts, agreements,
costs, expenses (including, but not limited to, attorneys' fees), damages,
actions and causes of action of whatsoever kind or nature, whether now known or
unknown, based on, arising out of, or in

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connection with anything whatsoever done, omitted or suffered to be done at any
time relating to, arising from, or in connection with all claims relating to,
the GTUK Indebtedness, any other expense reimbursement made by IESA in
connection with GTUK and any other amounts due to IESA in connection with GTUK.
IESA hereby expressly, knowingly, and intentionally waives all rights and
protections afforded in connection with the matters hereby released by the terms
and provisions of California Civil Code section 1542 and by any and all similar
laws of and for any other state of the United States and all foreign
governments. California Civil Code section 1542 states that:

     A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
     KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
     WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
     DEBTOR.

In connection with such waiver, IESA hereby acknowledges that it hereafter may
discover claims, obligations, rights, causes of action, claims for relief,
liabilities, and facts, or any of them, in addition to or different from those
that it now knows or believes to be in existence, accrued, or true with respect
to the matters hereby released. Nevertheless, it is the intention of each party,
through this release and with the independent advice of counsel or the
opportunity to receive such advice, to fully, finally, and forever to settle and
release all such claims, obligations, rights, causes of action, claims for
relief, liabilities, and damages that heretofore have existed, now exist, or
hereafter may exist in connection with the matters hereby released, including
those that could have been filed.

          (b) Each of the parties hereto represents, warrants, and agrees as
     follows:

               (i) Each party has received independent legal advice from its
          attorneys, with respect to the advisability of making the settlement
          of indebtedness provided for herein, and with respect to the
          advisability of executing this Agreement;

               (ii) No party (nor any officer, agent, employee, representative,
          or attorney of or for any party), has made any statement or
          representation to any other party regarding any fact relied upon by
          the other party in entering into this Agreement, and each party does
          not rely upon any statement, representation or promise of any other
          party (or of any officer, agent, employee representative or alternate
          for the other party), in executing this Agreement except as expressly
          stated herein;

               (iii) Each party has made such investigation of the facts and the
          law pertaining to this Agreement and of all the matters pertaining
          hereto as it deems necessary; and

               (iv) Each of the persons executing this Agreement is empowered to
          do so.

          (c) Each party hereto represents and warrants to the other party that
     it is the sole and lawful owner of all right, title and interest in and to
     every matter and thing released


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     herein, and that it has not heretofore assigned or transferred, or
     purported to assign or transfer, to any person or entity any claims or
     other matters released herein.

     4. This Agreement shall inure to the benefit of, and be binding upon, the
respective assigns, subsidiaries and successors-in-interests to and of each
party hereto.

     5. This Agreement sets forth the entire understanding between IESA and
Company with respect to the subject matter hereof, and no amendment to or
modification, waiver, termination or discharge of this agreement or any
provision thereof shall be binding upon IESA or Company unless confirmed by a
written instrument specifically referring to this Agreement which is signed by
an authorized signatory of each party. No waiver of any provision of or default
under this Agreement shall affect IESA's or Company's right, as the case may be,
thereafter to enforce such provision or to exercise any right or remedy in the
event of any other default, whether or not similar.

     6. THIS AGREEMENT IS ENTERED INTO IN THE STATE OF NEW YORK AND SHALL BE
CONSTRUED ONLY IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS ENTERED INTO AND TO BE FULLY PERFORMED THEREIN (WITHOUT GIVING
EFFECT TO ANY CONFLICTS OF LAW PRINCIPLES UNDER NEW YORK LAW), AND THE COURTS OF
THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY (MANHATTAN) ARE HEREBY GRANTED
EXCLUSIVE JURISDICTION WITH RESPECT TO ANY SUITS ARISING OUT OF OR WITH RESPECT
TO THIS AGREEMENT.

     7. This Agreement shall not be construed against either party as the
drafter, it being agreed that this Agreement has been drafted jointly by the
parties and may be executed in one or more counterparts, including by facsimile,
each of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.


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     IN WITNESS WHEREOF, the parties have executed this Agreement the date and
year first above written.

                                        Atari, Inc.


                                        By: /s/ Diane P. Baker
                                            ------------------------------------
                                        Name: Diane P. Baker
                                              ----------------------------------
                                        Title: EVP & CFO
                                               ---------------------------------


ACCEPTED AND AGREED TO:
Infogrames Entertainment SA


By: /s/ Thomas Schmider
    ---------------------------------
Name: Thomas Schmider
      -------------------------------
Title: DGD
       ------------------------------


Atari UK


By: /s/ Thomas Schmider
    ---------------------------------
Name: Thomas Schmider
      -------------------------------
Title: Director
       ------------------------------


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