Imax profit drops; DirecTV in the black
Sumner Redstone’s Midway Games reported disappointing earnings and lowered its guidance for the year, sending its stock plunging in after-hours trading.Midway, in which Redstone owns the majority of stock, was just one of several big vidgame publishers to recently report lower earnings in what was a tough quarter for the industry. Midway revenue in the second quarter ending June 30 was $36.9 million, down 22% from a year ago, and its net loss was $29.9 million, more than double last year’s $11.2 million loss. Company blamed poor performance on slower-than-expected sales for action game “Unreal Championship 2,” as well as development costs. Its other major release, “Area 51,” which has been optioned by Paramount for film adaptation, sold relatively well. Also hurt by the delay of major release “Rise & Fall: Civilizations at War” to next year, Midway reduced its revenue guidance for the year from $225 million to $200 million and increased expected net loss from $47 million to $60 million. Publisher revealed it signed a deal to produce a vidgame based on WB’s upcoming toon “Ant Bully.” Pact was expected when Midway previously agreed to adapt WB’s other 2006 toon release, “Happy Feet” (Daily Variety, March 30). In addition, on Thursday Midway anted up about $5.6 million in stock to acquire Australian game developer Ratbag Holdings. Midway’s report comes a week after industry giant Electronic Arts reported a sales decline and loss. Similarly, Activision shifted from a big profit last year to a $3.6 million loss in the quarter. Shares in Midway were up 4% at $13.84 before earnings were announced Thursday, but fell 10% in after-hours trading.