HOLLYWOOD — Struggling vidgame publisher Acclaim said Friday it may have to cease operations or seek bankruptcy protection if it can’t close a deal for additional credit.
Formerly a top player in its field, Acclaim has struggled of late, with its stock trading at well below $1. Company has failed to generate many hits and earlier this year it admitted it had committed a $9.5 million accounting error and would have to restate its earnings for fiscal 2001, 2002 and 2003.
Acclaim said it needs a new loan to replace a financing agreement that ends Aug. 4. Company said it has entered into a letter of intent for a new $30 million credit facility, but if an agreement isn’t formalized, it will most likely shut down.
In the increasingly hit-driven vidgame business, smaller publishers without high-profile titles have struggled to survive. Acclaim’s recent releases, including an “Alias” adaptation, haven’t become top sellers.
Eidos, the British vidgame company behind “Lara Croft: Tomb Raider,” has also had financial difficulties of late and is looking to be acquired.
News came as Acclaim reported its earnings for the fiscal year ending March 31, during which it lost $56.4 million on net revenue of $142.7 million.
Acclaim shares fell more than 20% Friday, closing at 26¢.