Interactive Magic Predicts Profitability
Monday's layoffs signal new focus on new online. Twenty staffers pay the price of progress.
A day after laying off 20 staffers, a slightly smaller Interactive Magic tries to shake the dust from its chaps and regroup - and as it looks to the future, it predicts better times ahead.
The company's well-known chairman and CEO "Wild Bill" Stealey, tried to put yesterday's events into perspective. In a statement the company expects to release late Tuesday, the man most of us wouldn't recognize out of a flight suit said, "We will continue to examine our business model to maximize efficiencies in our CD-ROM development with a combination of internal and external development teams. To bring expenses in line with sales, we have reduced our internal development staff to decrease operating expenses by more than 15 percent. We continue to explore new business relationships, which will extend our publishing capabilities and promote our Internet/online services. This will help ensure that Interactive Magic reaches the Company's goal of achieving profitability by the end of the second quarter of 1999."
One IMagic insider told GameSpot News yesterday, "You just take a look at where you're making money and where you're not."
In terms of where the current revenues are coming from, the company said it was intent on continuing to "license content to online distributors who have significant online communities." To that end, Interactive Magic must be eyeing the deal it made this year with America.
"Two titles, Fighter Ops and Raider Wars, have already been announced and are expected to start generating revenue at America Online's Games Channel during 1999. In addition, Interactive Magic and America Online have agreed to discuss placing future titles on The Games Channel," the company said.
The new landscape at Interactive Magic looks like this: The recent acquisition of online games community MPG-Net gives IMagic over a dozen new online titles to manage; as of yesterday it has consolidated its internal development teams; it has pulled the plug on two titles in the early stages of development; and it has eliminated 20 internal development positions at its North Carolina headquarters.
The company says it will soon be adding more than ten employees who specialize in Internet/online gaming from the MPG-Net staff.
The company is looking to become profitable by Q2 '99.