Atari’s Pong Indie Developer Challenge seeks to get all entrants to give away game ideas to Atari that Atari can then exploit, and the entrant relinquishes all further interest in the idea. Atari then selects 20 “semi-finalists” to put months of work into building out their ideas into playable versions that Atari has full ownership over. Half of those finalists will then receive a modest $5k payment for putting in even more work to complete their game. Finally the Top 3 “winners” will receive half of the advertised prize as a result of all their work, and are then subjected to a horrendous royalty structure as they seek to earn out the rest of their awarded prize.
Atari wins big as they get to cherry pick the very best ideas developers submit with absolutely no risk or costs. They then stand to make a huge profit on the resulting product long with terms that practically guarantee they will be profitable long before the developers see any sort of reasonable return for their efforts.
This kind of contest preys on developers who want to jump at the chance to work with a huge brand, and think it could be a great opportunity to make their big break. The reality is that the terms of this contest, exploits developers and only provide benefit to the sponsors putting it on.