Electronic Arts, THQ, Midway fall in earnings
The fall isn’t starting off well for a trio of videogame publishers, as Electronic Arts, THQ and Midway all reported somewhat disappointing earnings Thursday.
In addition, shares of Japanese vidgame publisher Konami plunged in Nippon after it delayed “Metal Gear Solid 4,” one of 2008’s most anticipated games, from the first quarter of next year to the second.
No. 1 third party publisher EA reported an 18% drop in revenues from the same quarter last year to $640 million. Net loss was $195 million, compared with a $22 million profit a year ago, but that shift was primarily due to a change in how it accounts for online game revenue. Without that shift, net income would have risen slightly from $67 million to $85 million.
“Madden NFL ’08” continued to be the franchise’s huge success, as the game has already sold 4.5 million copies worldwide from its mid-August release through Sept. 30. Sales were down a bit, however. By Sept. 30, 2006, “Madden NFL ’07” had sold 5 million units.
Other bestsellers for EA in the quarter included soccer game “FIFA ’08,” which sold more than 2.9 million units, primarily overseas, and “MySims,” which sold north of 1 million units just for Nintendo’s DS and Wii. EA also noted that its new skateboarding game “Skate” has been very positively reviewed, but didn’t release any sales figures yet. Game was released late in the quarter, on Sept. 24.
In more positive news, EA upped revenue guidance for the fiscal year ending March 31 to between $3.35 billion and $3.65 billion, a $150 million increase.
EA recently bought developers Bioware and Pandemic for a record price of $850 million. That’s expected to have a 5¢ per share dilutive effect in the current fiscal year.
THQ’s perf was in line with previously reduced guidance based on slow sales for its two major releases, “Stuntman: Ignition” and “Juiced 2.” Net sales fell from $240.2 million last year to $229.3 million. Net loss was $7 million, down from a profit of $11.6 million.
Continued sales of its adaptation of Pixar’s “Ratatouille,” which came out in June, also boosted the bottom line, though that game is trailing behind last year’s “Cars.” A vidgame sequel to “Cars” just came out this week.
THQ confirmed guidance calling for $1.06 billion in revenue for the fiscal year ending March 31.
Midway, which is majority owned by Sumner Redstone and Viacom, had a tough quarter due to what appears to be soft sales for its biggest release of the year, “John Woo Presents Stranglehold.” Company didn’t release sales figures, but the game didn’t break into the top 10 in the U.S. in September, meaning it sold fewer than 139,000 units in the U.S. following its release early in the month.
Midway said it has shipped more than 1 million units worldwide, though it’s unclear how many have actually sold. CEO David Zucker said he was happy with the response to “Stranglehold” and noted that sales have been solid in Europe.
Publisher has already had to lower guidance in the current quarter as it delayed “Unreal Tournament III” for the PlayStation 3 and several other games into next year. It lowered full-year revenue again Thursday, to $160 million, as it said several DS and Wii games have been delayed in Europe.
Revenue was up 34% to $36.7 million, but net loss also grew significantly, from $22.2 million to $33.5 million.
Shares in EA were down 4% to $58.74 before earnings were announced, but rose 5% in after-hours trading on the increased guidance.
THQ stock dropped 2% to $26.65 and another 2% in after hours following the earnings announcement.
Midway shares were down 7% at $2.90, but were back up 7% after hours.