Vidgame co. revs rise as Midway falters
The vidgame biz continues to heat up ahead of what’s looking like a strong holiday season, as Electronic Arts reported better than expected earnings Thursday and saw its stock shoot up 8% in after-hours trading.
Though net profit was down due to new charges for stock options, EA’s revenue jumped 16% in the quarter ended Sept. 30 thanks mainly to strong sales of its sports games, led by the indefatigable “Madden NFL.”
World’s No. 1 vidgame publisher also showed confidence in the holiday season, when Sony’s PlayStation 3 and Nintendo’s Wii will launch, upping guidance for the fiscal year ending March 31. Net revenue projections for the year bumped up from between $2.8 billion and $3 billion to $2.95 billion to $3.125 billion.
For the current quarter, EA is expecting revenue between $1.2 billion and $1.3 billion. That should be about even with last year’s perf.
“Madden NFL 07” sold an amazing 5 million units in just its first five weeks on sale, putting it on track to almost certainly be the bestselling videogame of 2006. Company’s “NCAA Football 07” sold a very strong 2 million units, as did soccer game “FIFA 07.”
Results weren’t as good for Sumner Redstone-owned Midway Games, which saw revenue fall 7% from a year ago amid soft sales for its “Ant Bully” adaptation and a new “Spy Hunter” game. Net loss fell 24% to $22.2 million.
For the current quarter, Midway is expecting a $2 million profit on $86 million in revenue.
For the fiscal year ending March 31, Midway increased its expected loss from $70 million to $73 million, which it attributed to declining margins on game sales for current generation consoles, where prices have been falling in the past year. Revenue guidance for the fiscal year stayed the same at $155 million.
Midway stock was down a fraction at $8.22 before earnings were announced, then fell 3% after-hours. EA shares closed up a fraction at $53 before earnings were announced.