Majesco gets analyst's thumbs-up

Nollenberger Capital Partners' Todd Greenwald adds once-troubled publisher to his coverage list, says it has successfully turned the corner.

Two years ago this week, the bottom fell out on publisher Majesco Games. But after overhauling everything from its management to the type of games it makes, the publisher might be staging a comeback. At least, that's what Nollenberger Capital Partners analyst Todd Greenwald thinks, as he today initiated coverage of the stock (NASDAQ ticker: COOL), giving it a "Buy" rating and projecting a return to profitability.

In 2005, after making an unsuccessful grab for top-tier publisher status with Psychonauts and Advent Rising, Majesco sharply downgraded its financial outlook for the year and CEO Carl Yankowski unexpectedly quit. The stock lost 47 percent of its value in a single day, and the company suffered one setback after another, from a class-action lawsuit from its shareholders to a messy split in the boardroom that ended with the resignations of two board members, the departure of interim CEO Morris Sutton, and a near-delisting from the NASDAQ stock market.

Since the beginning of its woes, Majesco has retreated from the frontline publisher market (selling its The Darkness and Ghost Rider titles to 2K Games along the way) and concentrated more on mass market and budget titles, with many of those coming on the Game Boy Advance, Nintendo DS, and Wii. It's a strategy that Greenwald thinks is paying off.

"We believe Majesco has had a first-mover advantage on these platforms," Greenwald said, "and will succeed by developing games exclusively for these platforms, while most competitors are mostly 'porting' games already developed for other consoles. This porting strategy will not necessarily work with the Nintendo demographic; this demographic is far from the core gamer, who is typically 18-34 years old, male, and interested in games like Madden, Halo, Grand Theft Auto, and Gears of War."

Greenwald points to Cooking Mama, Cake Mania, and New York Times Crosswords as Majesco titles that show the publisher "gets it" when it comes to what games will succeed on Nintendo platforms. Majesco shares finished today's trading at $1.64, up more than 12 percent from yesterday's $1.46 close.

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Discussion

58 comments
MOCHIRON_MAN
MOCHIRON_MAN

WAG066756, I disagree with you saying give it to another company that will, because then they might not come up with as good a story and music. But I strongly agree with finishing the game.

zizaz11
zizaz11

Advent rising is a must finish. It had a few bugs but it was my all time favorite game. Come on Majesco try again!!!!!!!!!!!!!!!!!!!

WAG066756
WAG066756

If Majesco isn't going to finish the Advent Triology give it to another game studio that will. To me the story was great and while the controls were hard to learn at first it became easy to learn after a few levels. To me this is a game that deserves to be finish.

umbracascade
umbracascade

i hope they haven't gone to the casual side permanently

spitfire1856
spitfire1856

I saw someone said they liked the storyline for Advent Rising. You should check out Orson Scott Card. He writes Sci-Fi and wrote the Storyline for Advent Rising.

Makhdoom82
Makhdoom82

Sorry but releasing mere two not that well known games doesn't mean success .... !!! :D Sometimes one Excellent title makes the day !!! :D

RaiKageRyu
RaiKageRyu

Taking the easy way out... Glad to have known you, shame that I had hopes for you.

Andy639_basic
Andy639_basic

It's depressing that they've been reduced to this. Yeah, Advent Rising wasn't so special but Psychonauts was a great game. Cake Mania and Cooking Mama Cook Off... not so much.

n_igma_nsider
n_igma_nsider

That's good news, for I'm a huge Nanostray fan. I just hope Majesco keeps on publishing innovative games for NDS and Wii, such as Cooking Mama, and don't push Shin'en too hard, 'cause a sequel like Nanostray 2 demands a lot of effort and patience from the development team and I wouldn't like this great space shooter to rush towards the shelves without the necessary "polishing".

Vulpis
Vulpis

Something to consider, those of you commenting on 'low budgets and mediocre games'--which would you rather have, mediocre games that sell steadily and provide a solid, fairly reliable income, or taking the big risks that are a crap-shoot whether you make a big gain or a big loss? Majestic took the crap-shoot, and it blew up in their face. Easy to see why they're taking the lower but more reliable path now.

barrett_rob
barrett_rob

Come on finish the Advent Rising trilogy

-Squirrel-
-Squirrel-

I think I may invest in these guys. The stock is cheap, they are on the up and up, and they are developing for the most popular platforms exclusively. And if they feel spiffy we might even get to see a few big budget titles like Blood Rayne 3, or the conclusion to Advent Rising.

Linkman25
Linkman25

@azad_champ: There's a big difference? Which is...? Anyway you look at it, more companies=more competition=better games for the public.

azad_champ
azad_champ

Yeah, Capt_billy, but they're also making titles such as Assasin's Creed and Army of Two. Majesco decides to focus entirely on a casual audience. There's a big difference there!

desolation00
desolation00

Tacking an obvious marketing ploy onto what turned out to be a mediocre at best game didn't turn out to be the best strategy. Nor was creating an expensive, albeit great, game in an already crowded category. I can see why they'd need to change their direction.

DoctorFu
DoctorFu

The first Psychonauts was top notch and I need another one. This is great news.

VeSupreme
VeSupreme

Yeah I liked Advent Rising and I need the next two games to come out.

HALOISTHEBEST26
HALOISTHEBEST26

advent rising had a very good story i would like a sequel

jeff003
jeff003

Great now that Majesco is back in the black maybe they will make a Jaws Unleashed sequel.They would be foolish not to since Jaws sold 500,000 units.

Agreb91
Agreb91

I agree with wath bigmick07 said. It is good for the both of them.

bigmick07
bigmick07

These are the type of companies that nintendo needs. Companies that are willing to develop games for their unique systems from the ground up. Both Majesco and Nintendo will pay of greatly from this move.

uglybob687
uglybob687

Oh good, can I have my A Boy and his Blob DS now?

Cypher_187
Cypher_187

[This message was deleted at the request of a moderator or administrator]

Capt_Billy
Capt_Billy

Yeah, azad_champ, because EA and Ubi with all their billions have never served up a rubbish game? Good to see another producer trying to get back on their feet. Competition breeds innovation, so let's hope they can pull it together and make the big boys try harder.

dragonslayer22
dragonslayer22

i need more bloodrayne and an advent rising sequel! please....

azad_champ
azad_champ

"We're Majesco, and we have such a low budget we will only make cheap minigames and mediocre titles."

DonutTrooper
DonutTrooper

I just hope they don't push my "piss me off" button, which consists of a two-part process: 1: MINI@#$@#@GAMES 2: Fall release. If that happens, they can say goodbye to my stock.

awexom01
awexom01

maybe a new guilty gear...... please?

Daeman_Uhr
Daeman_Uhr

Dammit hoes gimme more Blood Rayne!

flynow
flynow

Similar to Atari, Majesco is a publishing company that produces mediocre games however it only takes one or two big name games for the company to see black in their profit column. Looking at their line-up for the coming year I don't see any runaway hits but at a $1.64 per share currently the company is a good buy. Also consider their relationship with Taito as that is a huge factor in stability and quality. My $0.02.

peeweeshift
peeweeshift

hopefully they will remake advent rising as a next gen title with a the whole trilogy thing come together in one game. i really wanted to finish the story but hopefully that will allow them to create a better game that isn't disjointed. and hopefully they have there audio/cgi team working together with the level designers so the cgis dont abruptly cut the action up. hopefully they add some of those cgis into scripted events. that would reduce the load times that original had and make it seem less disjointed. i like the style they had but a shinier graphics engine would be nice. hopefully this happens and they do something different with the unreal 3 engine. well all i have now is hope for it

ketsuatama
ketsuatama

For once an analyst who might be worth his inflated salary. Going with Nintendo appears to be a smart move at present!

TomokiHimi175
TomokiHimi175

Critical success, yes. Commercial success, no. I still need a copy. =/

Foolz3h
Foolz3h

Majesco made me wait so long for Psychonauts. :( Still it was worth the wait.

somesthetic
somesthetic

psychonauts was never hated, but it didn't sell well. it was certainly a critical success. advent rising, not so much.

Zlightersword
Zlightersword

It's funny, really, when you think about it. Before, Advent Rising and Psychonauts were hated and heralded as failures. Two years later after a long course of adjusting, the games are heralded and you can barely find a used copy _anywhere_. Like a delayed action bomb of awesome. Good thing they're coming back. Who knows what will happen after this fall. A sudden rise to the top?

Pete5506
Pete5506

more mini games is right

S2333
S2333

Psychonauts rocked, just Majesco stuffed up BAD.

Vyse86
Vyse86

Its sad that publishing good games (Psychonauts, Phantom Dust and Raze's Hell) is what they did wrong. Now they have to churn out crap (well, mostly) just to survive. If you didn't buy Psychonauts hang your head in shame.

Ryosagi
Ryosagi

I believe Cooking Mama on the DS sold really well and was the "jump start" to their success.

John_of_Fire
John_of_Fire

Nice to see them stable again. If only I could afford stock. Hopefully they will recover well.

Gen007
Gen007

well then they didnt make some good games but they produced some good games same thing to me when the companies name is tied to the game it represents something that ame from them weather it be the developer or just the producer

LINKloco
LINKloco

More mini games. Hell yeah!