Majesco Entertainment announced its financial results for the fiscal year ended October 31, 2005, and the numbers were drenched in red. The Edison, New Jersey-based company has seen better times--most recently when investors flocked to its stock after analysts declared it a smart pick for Wall Street.
Things started to go south for the company when two of its highest-profile summer titles, Psychonauts and Advent Rising, tanked at retail. Stock prices began to tumble, the company's CEO jumped ship, and stockholders sued the company on the basis that Majesco overestimated its earnings.
The final tally of the company's arduous year is a mere $59.7 million in revenue, down significantly from the $121 million the company earned in 2004. The end of 2005 was particularly rough for the company, as Majesco's fourth quarter yielded a mere $4.6 million in revenue, a drop in the bucket compared to the $45.3 million taken in the final quarter of 2004.
"This has been a difficult year for Majesco. We entered the premium console market with high expectation for success, but as a result of a variety of factors we were not able to meet our expectations," said Majesco president Jesse Sutton. "Recently, we evaluated our product portfolio and have sold or canceled most of our premium console titles that were scheduled for release in 2006 and beyond."
Such titles include projects based on the classic film Taxi Driver and upcoming horror movie Demonik, both of which have been canceled, according to Web site GameCloud.com. The fire sale began late last year, as Majesco sold off the rights to Ghost Rider and The Darkness.
The company will now redirect its focus back toward value and handheld games, and will steer clear of premium console games.
"Publishing value-priced software and games for handheld systems has historically been one of our strengths," explained Sutton. "We believe that this strategy is more prudent for Majesco at this time and offers us the most opportunity for success as it requires a relatively low investment in development and marketing."
In addition to selling properties and canceling upcoming projects, Majesco recently restructured internally, laying off 20 percent of its staff.
"We have been in business for almost 20 years and have endured many cycles in this business. With a leaner organization, significantly reduced expenses, and a new strategy of focusing on lower-investment, value, and handheld products, we believe we have a plan that will enable us to operate our core business and give us greater flexibility to be opportunistic with regard to new products and technologies."
As of press time, Majesco's stock had fallen to $.83 in after-hours trading. At this point almost a year ago, the stock was near $17 a share.