Midway Q4 revs sputter

[UPDATE] Santa not so nice as October-December quarter nets out at an almost $37 million loss; next-gen TNA games in works, PC Unreal 2007 confirmed for winter release.

Midway Games released financial results for the three months and full year ending December 31, 2005, today.

For the quarter, Midway reported revenues of $69.8 million, down 9.6 percent from the same quarter a year ago (when it reported net revenues of $77.2 million). The bottom line was also down, as the company posted a loss of $36.2 million for the quarter.

For the full fiscal year ending December 31, 2005, the company had revenues of $150.1 million, down from $161.6 million the prior year. It posted a full-year loss of $112.8 million, compared to a loss of $24.7 million for fiscal year 2004.

In a statement, Midway president and CEO David Zucker said, "Midway's fourth quarter results reflect the challenging industry environment that has affected nearly all software publishers at this point in the console transition."

Commenting on the bright side, he added, "Nevertheless, Blitz: The League achieved breakout success for us, and our first Cartoon Network release, Ed, Edd n Eddy, performed well in the quarter."

Sequentially, this Q4 figure compares with the previous quarter's tally of a $29.1 million loss on revenues of $29.5 million. Midway blamed that poor showing on flat reorders of The Suffering: Ties That Bind and L.A. Rush. Also looming over the publisher's finances was the December news that it had shuttered its Adelaide, Australia, studio, laying off more than 100 employees.

In a conference call with industry analysts, Zucker confirmed that Unreal Tournament 2007 for the PC will be released in the winter. There was no mention of the PlayStation 3 version. Zucker also revealed that the upcoming Mortal Kombat game, Armageddon, will be the last Mortal Kombat game for current-generation systems. Though that franchise is winding down its life on its current platforms, older franchises will be getting new life on a new console. Following the success of Joust and others, Midway plans to release more games for Xbox Live Arcade.

There was also some good news for those who like to see big, sweaty men in high definition. In 2007, Midway is expected to release its first game based on Total Nonstop Action Wrestling (TNA Wrestling). Though it was previously announced only for current-gen consoles, Zucker revealed that next-gen iterations are also in the works.

Though Midway's financial numbers were slightly down, one number will be going up in the coming year. The company plans to hire as many as 100 new employees for its internal studios, as it ramps up for next-generation development. Midway expects to have about 725 staffers by year's end.

The publisher's internal studios won't only be getting bigger, but they will be working more closely together on upcoming games. Midway's suite of development studios, which includes houses in San Diego, Seattle, Los Angeles, Chicago, Newcastle (UK), and Austin, Texas, will all be working together with what Zucker calls a "common technology platform." For example, with the recently announced Wheelman, Midway's Newcastle studio will be the main developer. However, other studios will pitch in and contribute their own assets; for instance, the Seattle studio will work on the game's artificial intelligence, and the Chicago studio will work on the game's engine.

Much of Midway's attention seems focused on 2007, when it expects next-gen titles to be in full swing. Adding to its sunny outlook is the company's new method of determining a game's potential, which involves screening games for marketability and green-lighting only those that stand out from the rest. The first fruits of this process are expected to ship this year, with a "full slate" of "ambitious" next-generation titles expected in 2007.

For the current quarter ending March 31, Midway expects a loss of $22 million on revenue of $13 million.

In light trading today, Midway shares traded up, fractionally, to $10.93.

Written By

Want the latest news about Mortal Kombat: Armageddon?

Mortal Kombat: Armageddon

Mortal Kombat: Armageddon

Follow

Discussion

28 comments
dr23benway
dr23benway

There are no new games here, just rehashes of old franchises. People are getting tired of the same old garbage. Rampage, Slugfest, Unreal, Rush? Yawn. It was fun the first time around, but now? Not so much. Do we need another MK? If you rely on your heavy hitters for profits and that falls through what do you have? Nothing. Use your bean and come up with something new.

mik_evil
mik_evil

Not suprised, I don't own a midway game. What do they own, mortal kombat? a 14 year old title that tey have been redigging out of the grave and selling just because of the name. Make something NEW!! don't go the way of the dinosaur, im not saying names but.... sega, atari, acclaim, 3DO!!!!

Smoke2Much
Smoke2Much

A loss of $112.8 million last year !that has to hurt big time!They better get going with something big or it's going to be game over for MIDWAY!

haggisbag
haggisbag

They'd better not mess up UT2007 or I'll be supporting their going under. Release a game as good as UT2004 and I'll buy it at full price, but I'll be watching the reviews first.

PazUSA
PazUSA

I agree with the comments about gamers getting stingier with their money - I'm guilty of it too. Indeed, how many stellar games were there last year that youweren't better off renting from Gamefly (Plug! plug!). Most of the gaming companies are not paying the price for recycling tired, old franchises (YES YOU EA!!!!!!!), while those companies that are innovative (Ubisoft) are still doing very well. This industry needs a kick in the arse to stimulate some creativity and innovation. Maybe Nintendo are on the right track with Rev by trying to appeal to non gamers. I just can't see a non-hardcore gamer opting for a PS3 given the costs to manufacture and produce games for.

SavoyPrime
SavoyPrime

I hope Midway isn't internally developing the TNA Wrestling game. Get Aki to develop it!

NeoJedi
NeoJedi

I really hope UT2007 comes out this year.

cloudstrife75
cloudstrife75

markjet is down cause people want original titles like f.e.a.r... games that revolutionize and not copy other games or be mind-less shooters

ufopuller
ufopuller

The whole market has been down (not just games)

Fallout_red
Fallout_red

Hey Where is my Mortal Kombat 360? Thats what they need.

shrum91
shrum91

this is what nintendo is talking about...but hardly anyone listens..

Blazer88
Blazer88

Lesson-then,..stop putting out the same crap over and over,..and over or at least space sequals out.

i_love_my_ds
i_love_my_ds

that sucks for them. but it seems like its the same news with all companies

alberto2045
alberto2045

WHATS UNREAL IS TI UNREAL TOURMNAMENT?

davahsa
davahsa

What about Space Ghost and Aqua Teen? What 360 games are hitting this year?

KarthikKane
KarthikKane

It's no surprise since most of their games are buggy. Even the new MAT Deluxe Edition for PC, which was delayed for 2 months, remained unfixed like it's console cousins. It still puzzles me why Epic went over to Midway.

rusty_ghia
rusty_ghia

They expect to make money with those games? They're terrible. I've never liked Midway.

rehino
rehino

that really stinks for them

Orasion_Seiz
Orasion_Seiz

at least its not like whats happening to Atari right now.

spartan202
spartan202

translate & publish more ps2 japan games and i buy them

CelicaCrazed
CelicaCrazed

Well, if they made a true sequel for SF Rush 2049 (like Rush 2050 or something) or a new NHL Hitz game, then maybe they could get my money. But until they do that, they are getting squat from me.

fenriz275
fenriz275

I think gamers are also getting stingier with their money. More mediocre games means more rentals and less buying. Honestly, how many games were released in Q4 that were worth owning. Maybe a handful? Better games = better profit. Crappy games = less profit. Listen up Midway, just because you slap your logo on a game doesn't make it sell.

runstalker
runstalker

Everyone is switching gears to next-gen, new operating systems, multi-core hardware, you name it. The real killer = development costs and R&D. Makes it a lot more difficult to absorb low revenues.

hundredfirst
hundredfirst

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

Lauryn2000
Lauryn2000

You know this has not been a good month as far as revenue reports for the gaming industry,lay-offs,etc.Better stay tuned more bad news is sure to follow.