Midway trims Q1 losses, prepping Wii exclusives

Holdover sales help publisher trim January-March losses to $19.8 million; Stranglehold "expected in August," BlackSite: Area 51 demo coming.

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Unlike for many companies, Midway Games' fiscal year is exactly the same as the calendar year. So while other companies are talking about their annual results, the Chicago-based publisher today reported earnings for its first financial quarter, which ended March 31.

The good news was that Midway's losses were only $19.8 million during the three-month period, versus a $22.6 million loss during the same quarter in 2006. Speaking with analysts in a conference call, Midway CFO and executive vice president Thomas Powell credited the reduced loss to robust holdover sales of holiday releases such as Mortal Kombat: Armageddon and the muliplatform film tie-in Happy Feet.

The reason Midway's biggest Q1 2007 sellers were the same as its biggest Q4 2006 sellers is that the publisher had no new releases during the quarter. The dearth of fresh titles caused Midway's quarterly revenue to slump from $15.4 million to $11.1 million, year over year.

With nothing much to mention in the first quarter, Powell and CEO David Zucker were eager to tout the recently launched The Lord of the Rings Online: The Shadows of Angmar. Midway copublished the massively multiplayer online role-playing game with its developer Turbine Inc., and Zucker claimed the game has had "significant sales" since its April 24 release. He did not go into specifics.

During the call, the two executives promoted Midway's upcoming slate of games. These include the reworked Wii edition of Mortal Kombat: Armageddon, due out May 29, and the World War II shooter Hour of Victory, due out for the Xbox 360 "in June." During the April-June quarter, the company expects to take in net revenues of approximately $29 million.

Zucker also narrowed the release window for Strangehold, the eagerly awaited game pseudo-sequel to the classic John Woo action film Hard Boiled. According to the executive, the PC, Xbox 360, and PlayStation 3 title "is expected in August." That puts it just ahead of a crowded fall season, which will include heavy hitters like Microsoft's Halo 3 and Take-Two's Grand Theft Auto IV.

"We feel very good about the games we have coming out," Zucker told analysts. "Stranglehold is our first major, ambitious next-generation title. It's the one to look at in terms of critical reception for what we're planning."

Further ahead, Midway will release BlackSite: Area 51 on the PC, 360, and PS3 in the fall. Zucker promised that a demo for the shooter is also in stores in order to "give gamers a look at this exceptional high-quality game led by [Midway Austin creative director] Harvey Smith."

Zucker said that the Vin Diesel-starring PS3/360 action game The Wheelman will also arrive "later in the year" but did not say anything about the game's film sibling. Finally, the PlayStation 2-exclusive Aqua Teen Hunger Force Zombie Ninja Pro-Am was confirmed to ship in the fall.

Curiously, little mention was made of what will likely be the biggest game on Midway's roster, Unreal Tournament III. Powell said only that the success of Gears of War has stirred up a lot of interest in the Epic Games shooter, which is set to ship for the PS3, 360, and PC "when it's done," according to a Midway rep.

The call was not without surprises. When an analyst asked if Midway had changed its development plans in light of the success of the Wii, Zucker said his company had always supported the platform. He then revealed that Midway is working on two Wii-exclusive titles that it will announce later in the year.

Other topics touched on were Midway's 2008 release schedule, which Zucker promised would feature a similar number of titles as 2007, but of a "more ambitious" nature. Powell also addressed the subject of income from downloadable content on Xbox Live Arcade and the PlayStation Store.

"Gauntlet, Smash TV, and Root Beer Tapper continue to be the top sellers on the Microsoft online store," Powell said. "We are launching on the PlayStation online store adding Championship Sprint, Mortal Kombat II and Rampage World Tour. ... We believe that this, in addition to downloadable items and expansion packs, as well as our growing base of in-game advertising, will become a meaningful revenue stream."

Midway's outlook for all of 2007 currently forecasts the company's net revenues to grow around 36 percent to $225 million with a net loss of approximately $0.44 per share.

Discussion

63 comments
KaneadaSoul
KaneadaSoul

Here's the real question about Midway. What is Ed Boon hiding that will be revealed in the next few days. Check out www.noob.com

theKSMM
theKSMM

Midway looks like it has an interesting lineup of games slated for the remainder of 2007. Interestingly, it may be the downloadable retro titles that help to keep them afloat during their lean times.

DogNate
DogNate

I got to games to turn around those profits new NBA Hangtime or NBA Showtime, or at least put them on xbox live id buy for sure!!

Sw0rDMaN
Sw0rDMaN

Bah its only Midway.. I dont want to see them disapear but they are one of my least favorite game compagny

DeadManRollin
DeadManRollin

For UT 3..they should make it a scalable game, so people having older machines can also enjoy it. Graphically too ambitious games often fail to generate sales...who wants to spend $300 to play a $50 game?

TheJoker003
TheJoker003

UT3 should help them alot but i definitely don''t like their line up of games

fastpunk
fastpunk

Midway aren't going down. The fall season will have them up and running. Plus, they've got an ace up their sleeve: UT3. I can't wait for that game to be released.

earth79
earth79

midway's gonna go down. it's inevitable. i like their games but i think that they're gonna go down like acclaim.

koin999
koin999

That is a lot of money to be losing, but I think that Midway have been in the game business too long to go daown that easy. Personally, I thought that Area 51 was a pathetic game, and David Duchovny was a hopeless monotone whiney annoying character voice. Heres hoping they make the 2nd one better. UT3 should be awesome.

yager124
yager124

Cant wait for Unreal Tournament 3 and Blacksite: Area 51, now i want to know when UT3 coming out.

Gooper_Blooper
Gooper_Blooper

Midway seems to be in trouble. That's a shame, because I've always liked Mortal Kombat and Rampage for their basic, simple, dumb fun.

Doolum
Doolum

stranglehold....yeah baby.

okassar
okassar

Well don't expect to produce a Happy Feet game and expect to make god dang money! Lemme guess the Wii controls for that, wiggle around your controller to flop a penguin around in last gen graphics which is probably poorly produced too. Anyway, HAPPY FEET!!!!!!WHAT THE hElL!!!!!!!!!!!!!!!!I never bought any of Midway's games because non of them had a rating that I would want to look at nor a story I want to engage in.

Player1_HDS
Player1_HDS

Awww, when I saw an article about Midway I immediately searched for UT2k7 news, bummer.

mismajor99
mismajor99

Give me UT3 for the PC, or give me death! With all the multi-platform development going on, it's no wonder it's not out yet. At least release it on the PC, as you have to think they are holding all versions until they are all complete for a simultaneous release. Does anyone have a feeling that UT3 won't be shipping this year? The rep only commented, "when it's done", with not even a mention of this year. I'm putting my money on UT coming out Q1 of 08, sadly, due to the massive release of games in the fall by all platforms. In the meantime, UT2K4 is holding me up just fine, but I'm getting anxious!

dmastor
dmastor

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

GunGriffin
GunGriffin

From a development stand point it woould be in alot of compamies intrest to develop games on the Wii with it haveing such a huge fan base and a large amount of instal base more so than any other console on the market it would be stupid not to make games for it. Exclusives or not this could be the start of a growing trend for Nintendo gamers like me and everybody who owns one.

Dust24311
Dust24311

Wii already has nearly 7 million owners. It will have 15 million by Christmas. Expect to see more of this Wii exclusive thing happening!

Reetesh
Reetesh

UT3!!! When are you coming!!!

DoctorFu
DoctorFu

ssj4_2004, XBLA already has a great version of Ultimate Mortal Kombat 3.

zsc4
zsc4

:shock: Lets see what happens tot he Wii exclusives...

Selfdestruct9
Selfdestruct9

"When its done" 08 for sure, sadly. . . UT3 :(

ghostadv
ghostadv

Hmm, wonder what the Wii exclusives are. Hopefully they won't be mini-game related, we're sick of those.

Pete5506
Pete5506

ooo hope the game for the wii is good

Warlock89
Warlock89

Unreal Tournament III will make Midway happy....and most of all..... me.

Nintendo_Man
Nintendo_Man

What a weak line-up, their bias against Nintendo has seen them lose out on getting alot more money. The two games they are making for the Wii probably will flop.

porphyrous
porphyrous

This is funny.... "The call was not without surprises. When an analyst asked if Midway had changed its development plans in light of the success of the Wii, Zucker said his company had always supported the platform." When caught totally flat-footed by the market, this CEO does the best thing possible: lie. ;-) The only Midway title on the Wii I can think of off the top of my head so far is "Happy Feet", which was embarassingly bad on every platform it was released on. Although I thought I saw a May release date for a Wii version of "Blitz: The League". And "Mortal Kombat: Armageddon" has at least gotten some attention. Cylux Elite wrote: "Two Wii exclusives! I'm intrigued because I don't normally here the words Wii and exclusive together when it comes to a third party developer." Konami and Ubisoft both have had Wii exclusive titles as well. David V .

ssj4_2004
ssj4_2004

Cyrax-Sektor , I honestly hate to burst Your bubble, seeing as I'm not A PS3 fan. But MKII is coming to the PS3 store. They haven't announced plans to bring it to Virtual Console or XBLA :(

comthitnuong
comthitnuong

Hope they can put something good on the Wii...

interpolred
interpolred

I wonder what the two upcoming Wii games will be...

QofBanditZ
QofBanditZ

Where's my next Blitz: The League football game?

ringbling
ringbling

Lots of games... no excitement. I was more excited for MKII, which has quickly faded as it was a LAME port.

SyluxElite
SyluxElite

Two Wii exclusives! I'm intrigued because I don't normally here the words Wii and exclusive together when it comes to a third party developer. :P

the-very-best
the-very-best

"That puts it just ahead of a crowded fall season, which will include heavy hitters like Microsoft's Halo 3 and Take-Two's Grand Theft Auto IV." Better release the game before these games, Stranglehold looks pretty good.

jesterboy850
jesterboy850

What about some info on the next generation mortal combat. Us mk fans have been waiting to long already for some new mk info.

Homes225
Homes225

Sweet. Come on HoV, Stranglehold, and Blacksite!