Unreal Tournament III can't turn Midway around

Publisher's fourth-quarter and full-year financial results show growing losses on shrinking sales.

2007 may have been a record year for the gaming industry, but a rising tide doesn't necessarily lift all ships. Despite the long-awaited launches of Unreal Tournament III on the PC and PlayStation 3 and the John Woo-Chow Yun Fat vehicle Stranglehold, Midway Games saw declining sales and mounting losses for 2007.

The publisher reported its fourth-quarter and full-year 2007 financial results today, and its sales fell short of already-lowered expectations. Even with the PlayStation 3 version of Unreal Tournament III unexpectedly sneaking onto shelves by year's end, Midway reported fourth-quarter sales of $78 million, short of the projected $80 million and down from $97 million for the last quarter of 2006 (which saw the company release hits like Mortal Kombat: Armageddon and Happy Feet). For the full year, Midway reported revenues of $157 million, shy of both the $160 million forecast and the $166 million it brought in throughout 2006. As recently as August, the publisher had expected $225 million in full-year revenues.

In addition to sinking sales, Midway has to deal with growing losses. The company's net losses in 2007 surpassed $97 million, compared to $78 million the year before. The fourth quarter was especially rough, as Midway lost nearly $30 million over the holiday shopping season, compared to $2 million for the same period of 2006.

"2007 was a challenging year for Midway as we made the transition to the next-generation of consoles," said Midway president and CEO David Zucker in a postearnings conference call.

Despite the publisher's difficulties, there were some highlights for Zucker. Midway had three games reach the million-unit-shipped milestone in 2007. Those titles were Stranglehold, Unreal Tournament III, and the 2006 release Rampage: Total Destruction, which Zucker praised as "a perennial catalog seller."

The company's upcoming slate of titles including TNA iMPACT! and This Is Vegas also had Zucker optimistic, as he said, "For the first time in recent years, we believe we have a number of titles with the potential to break out and overachieve."

Zucker also said the company would continue to court the casual market with titles like Touchmaster for the DS and Game Party for the Wii, but Midway's still going to turn to titles like the 2008 installments of Mortal Kombat, Blitz, and the debut of The Wheelman to rack up sales.

"We're really focused on fewer, bigger, better... on creating those breakout games that can really move the dial on the revenue side," Zucker said.

For the current quarter, the first of Midway's 2008 fiscal year, the publisher expects revenues of $28 million for a net loss of $.30 per share. That's a big sales boost over the $11 million in revenues it posted for the same period last year, but a deeper loss than that quarter's $.22 per share shortfall.

The publisher today also announced that it has terminated a $30 million line of credit with Wells Fargo Foothill in favor of a $90 million credit line with National Amusements, Inc., an outfit headed up by Midway chair of the board Shari Redstone and controlling stockholder Sumner Redstone.

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165 comments
plm3d_basic
plm3d_basic

Blame it on piracy like every other game developer.

robathy
robathy

Midway are increasingly cutting their support of PC gaming to concentrate on Next Gen consoles. Is it just coincidence they're now making losses and not pulling in the revenue? I don't think so. That is my mostly uneducated opinion.

Negemite
Negemite

Midway might go bankrupt if they don't do something.

vonmurder
vonmurder

Apparently you gunsels fighting muti-billion dollar corporations' battles cannot appreciate your games on your respective systems as individuals. someone hates your favorite game or your system of choice? **** you're screwed. How can you have a good time with MGS or GOW knowing someone HAS A PREFERENCE IN GAMES THAT DEVIATES FROM YOURS?

vonmurder
vonmurder

[This message was deleted at the request of the original poster]

Ares_hot
Ares_hot

playstation 3 is in most ways better than xbox 360, hardware speaking, but the 360 has better online services and... well... that halo 3 and gears of war. But still, playstation 3 has games like resistance, uncharted and motorstorm and games like resistance 2, motorstorm 2, killzone 2, gran turismo 5 and haze at the horizon. ,I,,

jedimasterjl
jedimasterjl

thecakeisalie47 - WOW. great speech. ur right too, ps3 does have mgs4...... oh wait, thats ALL it has! and i can see it being better than GoW for sure! not. you helmet. stop trying to convince yourself that ps3 is in someway superior too. Fact? it is not. and kudos to you ripping on GoW, you're right there too, what a lousy game, it only sold 3 million copies in its first 2months. second only to halo in sales at the time, which is ANOTHER xbox game. So maybe you would like to post something useful and non-fiction if the Ps3 ever manages to release a decent game? keep your false lame opinions to yourself buddy - perhaps post back when mgs4 becomes a bigger game than ANY successful xbox game? (pick from a large ever-growing list). I think NOT ;)

juggleJUGGLER
juggleJUGGLER

stranglehold was too short but was fun. no one cares about UTR 3 so i wouldn't consider it shocking for them to lose money. lets hope they can make TNA IMPACT fun though.

getrealwithme
getrealwithme

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

BlueyesCyclone
BlueyesCyclone

And one other thing if they hyped up the game and advertized sorry about my spelling the game properly the sales would of been so much better there was no adverts on TV for the game baners on busses in the UK what the hell was they thinking and i keep hereing that they were spending more time on GOW2. Well that just shows its got nothing to do with what console it comes out on cause they like to cut conners and rush things don't get me wrong its still a great game. but more games that get rushed and don't get hyped up don't sell well. No matter what console you put it on proberly wont sell well on the 360 to. But its still a great game seacond best to RFOM in my books.

BlueyesCyclone
BlueyesCyclone

I love it how i keep reading if it was brought out on the 360 the sales would be better because the PS3 sucks. Well for one of course the sales would be alot better because it would of been out on the PC PS3 and the 360. And i don't know why people wont buy the game i have and it rocks i've got on in the background. what i don't get is if you have a Blu-Ray disk they could of made the Online play have up to 60 players just like RFOM. People that have a PS3 and Like FPS should get this game your missing out big time.

kjk07
kjk07

I'm looking forward to TNA Impact. Its gaining some ground but not sure how many other people even watch TNA though so I doubt they're going to get a blockbuster in sales from it.

Rezzy_Rod
Rezzy_Rod

thecakeisalie, what games are you speaking of? I've played Drakes fortune. Which PS3 game would you recommend, that incorporates a "good story"? I own a PS3, and so far I regret spending a dime on it. Tell me what games are available "right now" that deserve my attention!

thecakeisalie47
thecakeisalie47

P.S. The game didn't sell well on PS3 because PS3 owners actually enjoy more than quality graphics....something like, oh I don't know.....A STORY.

thecakeisalie47
thecakeisalie47

PS3 has nothing? OK, that's cool. How about MGS4? Have you forgotten that? Let's see, we could play Gears of War, yeah; we could go through areas, shoot bad guys, chainsaw them, listen to terrible lines, watch terrible cutscenes, shoot some more, play stupid boss fights, and not have any story context to do it in: except aliens have invaded, fight back (snore). Oh, and as for multiplayer...Team DM over and over again with MINOR twists on the rules (and some crappy add-on CTF). Then you get the **** extremely stupid, low class jerks that flood XBL. Don't believe me? Just check out the awesome literacy of "pourya_ahmadian" below me. The people sucking off their parents, ruining fun value in games. Great, sounds like a plan! Or, we could play MGS4 and experience true craftsmanship and greatness in all represented forms. Damn you people that ruin fun in games, the people who think they are industry insiders because you read websites and magazines, and you're absolutely right no matter what (so you think). The same people that think only graphics matter in games. It's sad, man. It really is. YOU ARE KILLING GAMING AND THE FUN IT IS SUPPOSED TO BRING. If people in here can't admit that, they are one of those people Think about it...

pourya_ahmadian
pourya_ahmadian

all you say;there is clearly that great XBOX360 have so larg nomber top games in any fields;but poor ps3 have nothing;

HolteEnder4Life
HolteEnder4Life

@ Homerj: who cares if Epic "insult" us (not even sure if that is true), if they continue releasing games like Gears of War on the 360, i'll fund it till i die i mean, at the end of the day, its all about the games.

Stu1515
Stu1515

Their sales are down because UT3 hasnt been released for 360 last quarter.

lamprey263
lamprey263

well, I thought Stranglehold was cool, even though the multiplayer sucked, th game single player game was pretty awesome

mrgroot
mrgroot

Agermemnon: I didn't ask who published UT3 or GoW, my post was in response to pourya_ahmadian.

Agermemnon
Agermemnon

UT3 is on it's way to 360 info reg it on the Epic site in the forum bit .

Agermemnon
Agermemnon

@mrgroot Midway only published UT3 and Microsoft game studios published GoW .

mrgroot
mrgroot

Uh, no....Gears of War is an Epic release, not Midway....

pourya_ahmadian
pourya_ahmadian

the great GEARS OF WAR gave a huge profit to midway(because of great XBOX360);and you can see when UT3 come to great XBOX360,it will do the same;

tearo
tearo

I want news about the new Mortal Kombat

ghost867
ghost867

As a whole last year, they had Lord of the Rings: Online, Stranglehold, Blacksite, and UT3 as their big titles. Two of which reviewed very well (LOTR Online and UT3), but didn't sell well. Stranglehold and Blacksite, unfortunately, didn't turn out so well, and that showed in the sales as well. Overall, Midway didn't have a good year at all. Looking to the future, there were rumors that the 360 version of Unreal Tournament III were being canceled due to Gears of War 2's release, Microsoft restrictions on it's platform, and incentive from Sony, but all that's pretty much thrown out the window now. Midway needs to bring out UT3 on 360, with a demo, to hopefully give it some hype, and get it to sell. On the horizon, you have Blitz 2009, This is Vegas, The Wheelman, and NBA Ballers, which, with some work, could all actually do alright. But it all depends, nothing is definite. So Midway is in a bit of a rut. They don't have the luxury of having a Halo or a Grand Theft Auto or a Madden which will sell millions regardless. They gotta work for sales. Though they do have two games which have a little more hype rolling behind them: Mortal Kombat 8, and TNA Impact. The next Mortal Kombat will most likely do well, though they've lost a bit of steam with the series, and it could use a refresher. TNA Impact is a game that's really being hyped by the wrestling game crowd, so that should do well also. Those two are really the only things they can take for granted, but even still, that gotta make sure that everything clicks. Side note, if you have a PS3, and you like FPS games, just go out and buy the damned game. Unreal Tournament III is awesome, you'll have so much fun online with it, and the single player isn't as bad as everybody makes it out to be. Plus it has co-op, and everything is more fun in co-op. Just ****ing buy it, it's beyond worth it. Hopefully Midway can fall back on some old series that have done well to get them back into shape. Then they can move out to new IPs from there.

7thRonin
7thRonin

beeker youre one funny guy

Beeker1
Beeker1

Why did Midway publish UT3 if I was Epic I would of gotten reed of Midway and sticked with Microsoft Game Studios, Because look at Gears of War and Halo look at them both. :Gears of War: 06 Game of the year :Halo: 02 Game of the Year :Halo 2: 04 Game of the year :Halo 3: 07 Game of the year, oh and Mass Effect: One of the 07 Game of the year

zaid55
zaid55

I despise midway and every game i have played of theirs was a total waste of money.

raverrozza
raverrozza

i said i was definately gonna buy UT3 but i am still punishing COD4 online so as a poor student it didnt make sense for me to buy another multiplayer shooter.

DvTJonahHex
DvTJonahHex

Midway screwed the pooch on UT3: they released it before "it was done." UT3 has been out for 4 months now and it is still not done. The Demo was released and the Unreal community came unglued over how bad the user interface was...two weeks later the game went Gold with virtually no changes to the UI. Four months later the UI still sux. "You only get one chance to make a first impression" and the first impression of any program is the UI. Fortunately, the UI isn't the game. The game is great, but the suXXor UI turned off too many people before they ever got to the game. Midway/Epic, next time listen to your customer base...and, Epic, don't let it go Gold until it is done, regardless of what the publisher wants.

speedjunkie4
speedjunkie4

Nothing is going to save Midway now. Strange, they never mentioned Blacksite: Area 51.

Disciple_Gamer
Disciple_Gamer

What Midway should have done was release UT3 multiplatform at the same time. They better pay attention to what capcom is doing. DMC 4 is a shiny example.

blacksaibot
blacksaibot

Mortal Kombat is probably why Midway can afford half of what it does. Bring on MK8. If you don't like MK, shut up and turn the other way.

pycho22solid
pycho22solid

We need a new mortal Kombat, but please improve the fighting system-it would look very stale compared to Soulcalibur 4 and Street Fighter 4 if it stayed the same way

lamprey263
lamprey263

I just want Midway to bring back the Hitz and Blitz series, the way that they used to be.

Homerj
Homerj

"This is what you get for siding up with a floundering console and releasing a half-hearted PC version. Epic are looking to saddle up with MS any day. See Gears of War 2 for proof." Therein lies the problem. Epic took the profits they made from GeOW to invest in smear campain against the console and community that made them the money in the first place. When all that anti-360 hype did them no good and UT3 fell flat on its inferior face, Epic comes running back to the 360 community with another cash-cow with nary an apology in sight. And unfortunately, the 360 community will almost certainly prove to be sheep and open up their wallets to fund another round of insults against them.

nate1222
nate1222

@HotTopFade and drangel_jam You two nailed it. MKTrilogy and NBAJam as downloads on XBL, PSN and VC would so rock. Those games have huge followings and could EASILY turn a profit. How about 'UT2004' as a download on XBL and PSN? I'm not expecting a download of UT on the Wii, but a compilation disc with UT2004 and some older favs on Wii could do well if properly marketed.....

nate1222
nate1222

I believe Midway can bounce back. But first, they've got to focus on the franchises that blew them up. MK and Unreal in particular. I liked UT3 on the PC. But UT2004 was better and it wasn't a f---ing resource hog, either. I still play MK Deception on my GameCube and it's actually better than Armageddon. Instead of flashy graphics (a fixation that's wearing out its welcome in the industry lately), Midway needs to focus on what made them successful. MK and Unreal both featured fast, fun 'arcadey' gameplay. Those titles also had a kazillion game modes to avoid boredom. And as far as "graphics" goes: Deception was perfect just the way it was and Unreal2004 still looks AWESOME in my book. We don't need to see our avatar's 'nostril hairs' for a game to look great. This would also make Midway's PC line-up more mass-market, as it wouldn't require monstrous hardware to run it. Look at the Wii, it's graphics are VERY LAST-GEN yet, it's the most popular console this gen. Besides, I still think graphics got as good as they NEED to be last-gen.

andrew_ribbons
andrew_ribbons

This is what you get for siding up with a floundering console and releasing a half-hearted PC version. Epic are looking to saddle up with MS any day. See Gears of War 2 for proof.

Homerj
Homerj

Thats what happens when you build a game for the PS3 and port it to the PC, instead of the other way around. Instead of getting a full-featured PC UT game with current gen graphics and the full frantic speed that the franchise is known for, they got a slowed-down, graphically toned-down, gameplay dumbed-down game that was little more than a tech demo to prove that Epic could force the UE3 to run on a PS3 (something that their longtime dev partner DE could not do and something that SK sued them for not delivering when promised well over a year ago). I hope this is an object lesson for all the devs that now want to start all multiplat dev on the PS3 first simply because its the lowest common denominator in the industry and its cheaper to start a game dumbed-down than it is to dumb it down after its complete for PC and 360.

Rufrgt2001
Rufrgt2001

I think they're biggest mistake was not having UTIII split-screen multiplayer on the PS3. Thats the only reason i didn't get it, i wanted to play with my friends in the same room, and im sure there's many others that didn't buy it for the same reason.

hotdork70minus1
hotdork70minus1

It will be on the 360 in a month, then it might bring them up a bit but I doubt it. Too many other good games coming out.

Get_Shorty
Get_Shorty

If you don't have UT III for the PS3 your missing out. There are only a hand full of PS3 exclusives that are good and this is one of them... maybe when more people actually buy PS3s.

hotdork70minus1
hotdork70minus1

Unreal was huge for PC but was never that big of a deal on consoles. The first major money game pro's were making their wages in UT and Counter Strike but now it's gone mainstream and UT has pretty much been left behind.

imortiferus
imortiferus

@peacenutman "They need to hype the hell out of UT3 if they want it to sell good, I mean they hype the crap out of Gears, that's why it sold so well". Youre kidding right? the reason gears sold in the millions was because it is a superior game!

hotdork70minus1
hotdork70minus1

Thats what you get for not releasing on the 360 at launch. Guess Sony didn't pay nearly enough to get it exclusive for 6 months.

razu_gamer
razu_gamer

this is bad news and good news for Wii owners. Either, Atari make a good game for Wii and make profit. Or add more shovelware and sell 100000 and still make profit to be used on PS3 and 360 games. *shudders*

darkride66
darkride66

UTIII was well received by the critics, and crossed the one million mark in a short amount of time. That doesn't sound like a "bomb" by any stretch of the imagination. I also thought I'd comment on what 09231991 mentioned below "The point of exclusivity is to prove which system can pump out better games." Ok, are you really that naiive? You don't think that any developer out there, any of them, wouldn't gladly pimp their games on the most amount of systems possible unless they're receiving some sort of financial compensation to stay exclusive? Get over the fanboy, system wars crap. I, for one, don't like that I have to own 3 different consoles to get the most out of what gaming has to offer. The developers are responsible for the great titles, not the consoles, and if they want to release GOW on the 360 and the PS3 or bring MGS4 to PC or the WII, more power to em.

duhNeighbour
duhNeighbour

"n3ck: ... Also this is a huge ONLINE GAME and the fact that the PS3 has no online service yet make this release even more bizarre." The PS3 HAS online service; it's called PlayStation Network and it's free. Really don't know how you could've missed that unless you don't know anything about the PS3. Do you also know that the Wii has online feature?