Midway lowers outlook after grim Q3

Reporting a $33.5 million loss during July-September quarter, publisher says PS3 game delays will affect its holiday revenues; Stranglehold ships 1 million units.

He may play the unstoppable supercop Inspector Tequila in Stranglehold, but action star Chow Yun-Fat couldn't save Midway Games' third fiscal quarter. For the three months ending September 30, the troubled publisher reported a $33.5 million loss on $36.7 million of revenue. During the same period in 2006, it lost $22.5 million on $27.4 million in sales.

The losses came in part because of the staggered released schedule of Stranglehold, the first next-generation console game Midway has self-developed from the ground up. Although the Xbox 360 and PC editions of the third-person shooter--which is also the sequel to the film Hard Boiled--were released in early and mid-September respectively, complications with the Unreal Engine 3 led to the PlayStation 3 version to be delayed until the end of October. Despite the delay and subdued reviews, Stranglehold still shipped over 1 million units worldwide.

Though Stranglehold's late arrival on the PS3 hurt Midway's third quarter, the delay of two other games for the platform contributed toward causing the company to lower its guidance for its full fiscal year, which ends on December 31. In early October, Midway said it no longer expects Unreal Tournament III to ship for the PS3 in time for the holidays. (The game is gold for the PC and will ship on November 19, and will arrive on the 360 next year.) The PS3 edition of BlackSite: Area 51 will also trail its PC and 360 siblings (due November 12) by nearly a month, which narrows its Christmas retail window to just two weeks.

"Midway is lowering its financial outlook for the full year 2007 primarily to reflect the movement of certain Nintendo Wii and DS titles out of this fiscal year, mainly in the European territories, as well as lower expectations for PS3 product sales due to delayed release dates resulting in shorter holiday selling periods," said the company in a statement. It did not name the Wii and DS games specifically.

Midway now expects $80 million in net revenue for its fourth fiscal quarter, with a loss of approximately $0.21 per share. For the full year, the company now anticipates $160 million in net revenue, with a net loss of approximately $0.95 per share. The new figure is a $65 million decrease from the $225 million in full-year revenue the company said it expected back in August.

"We remain confident that our technology strategy and product plan position us to grow both revenue and market share as we move into the heart of this console cycle," said CEO David Zucker in a statement. "In the coming months, as we reveal more details on our strong lineup of new IP and major franchises for 2008, we expect to show investors how we plan to realize significant growth in 2008."

54 Comments

  • Shivercraft

    Posted Nov 5, 2007 2:47 pm PT

    How can EA accept that Unreal Tournament 3's engine is the reason for a late release for UT3 on the PS3 when the game with the same damn engine is on time for the PC. Smells fishy to me.

    Saying that a delay is the reason that Stranglehold will not do good is also retard logic. Stranglehold sucks....that is the reason it's not selling well. I find it hard to give a company any sympathy when they say that the PS3 will have late games due to programming issues, when several others have no problem releasing big games, with nicer graphics on the system, at the same time as the other platforms. COD4 being a recent example of this as well as Guitar Hero 3.

    It is time for some companies to face the music, the games aren't doing well because you are making crap games with big names....and it is starting to catch up to you.

  • Homerj

    Posted Nov 5, 2007 12:17 pm PT

    Midway can rest the blame for their financial state directly on the shoulders of Epic. If Epic had been honest upfront instead of towing the Sony company line, maybe their publishers could have known in advance what a crapshoot UE3 based titles would be on the PS3. Epic was making a little coin with a timed-exclusivity contract with Sony...so all they did is lie, lie, lie. Now they are being sued by SK, getting trashed all over the media by DE, and their publishing partner is getting financially hammered, all because they made their brags about how great UE3 games would by on Sony's "superior" console, and then had to suck up and admit that UE3 wont run at all on PS3 after their own in house title missed release and had to go back for months more of dev time. Too bad Midway has to suffer for Epic's stupidity, but then again....as a publisher, they should be more careful of which devs they work with.

  • thekey

    Posted Nov 5, 2007 9:48 am PT

    RavenousEnemy "LoL@PS3"

    LOL @ PS3! and the fact that they should look at this situation there in, and when they come up with the PS4 make sure Blu-ray, and the cell processor's successor is up to par next gen.

  • AJ-2K7

    Posted Nov 5, 2007 8:25 am PT

    wat are you talking about fvoska! the ps3 gets regularly updates every month. if any thing its probably better graphics on ps3 than pc!

  • fvoska

    Posted Nov 5, 2007 6:00 am PT

    yeah... keep buying PS3 newbies ! PC rocks... As for UT3 I can't wait...

    When devs are making the games for PC and PS3, they are limited within PS3 limits. With PC limits are pretty much higher, especially with UE3...

    We all know that Epic won't cut down UT3 graphics look or change the engine so that it fits to PS3. PC is their priority and they will make the best PC version they can and then they will start optimizing game so that PS3 can run it... They will never dissapoint PC gamers... PC is their No.1 platform and they are creating games for PC primary, not for PS3. While they are creating the game, they think "How will it run on PC ?". Not "How will it run on PS3 and 360 ?"... Unlike some devs... And in these times that is 100% needed... Game devs who are thinking for PC gamers benefit...

    And how did they in Sony think now will they leash the UE3 for PS3 ? PC games engines shouldn't EVER be ported on consoles. Situation is even worse with console to PC ports... That's the stupidest thing to do. This is the first time Unreal game comes out on consoles. And they shouldn't even changed that... Now they have only problems... And the most gamers who are interested in UT3 will probably buy the PC version becouse they won't wait so long...

    After the game is finished, they think about PS3. And that's the reason why the PS3 version is pushed off, among with the PS3 limitations...

  • RavenousEnemy

    Posted Nov 4, 2007 10:53 pm PT

    LoL@PS3

  • ctg867

    Posted Nov 3, 2007 11:54 pm PT

    I don't know what they were expecting with Stranglehold. Maybe if they dropped the crappy online, strengthened the single player, and actually got the PS3 version out on time, maybe they'd be alright. Sorry, but you can't knock Sony too much when all these other companies are getting high quality PS3 games out the door on time.

    As far as UT3, it'll be much better then Stranglehold for sure, but still, same situation with the PS3 delay. It's just lazy at this point. There's a reason Epic is being sued for failure to support it's engine licensees.

    As far as Blacksite is concerned, give up on that now. That game is going nowhere fast. Time to get some new IPs Midway, time to get some new IPs.

  • GhostyMcboo

    Posted Nov 3, 2007 4:12 am PT

    wow... do they have anything other than SHOOTERS????

  • ddt88

    Posted Nov 2, 2007 9:38 pm PT

    This will be a common occurrence with publishers developing for the PS3. Unless Sony can get a set of tools out like XNA they will never fix the delay issues they have with their console.

  • MasterChief725

    Posted Nov 2, 2007 9:02 pm PT

    does anyone still have any hope for hour of victory PC....i guess not...i do......

  • swyg

    Posted Nov 2, 2007 5:09 pm PT

    This is so not their Hour of Victory

    Win.

  • elguino3

    Posted Nov 2, 2007 4:32 pm PT

    thats soooo gay wtf all these developers have problems developing games for the ps3 do they mean they were to busy sucking bill gates **** to pay attention to it

  • BigDaveyDogz

    Posted Nov 2, 2007 1:48 pm PT

    Sony = the death of developers!

  • darthzew

    Posted Nov 2, 2007 1:41 pm PT

    This is so not their Hour of Victory...

  • rangeraa

    Posted Nov 2, 2007 1:10 pm PT

    wow most of you sound like two year olds. If you can't at least type so people can understand you you should save us all the trouble and just not post, you illiterate wastes of skin! wars45 is a perfect example of an illiterate tool

  • SaintRasmus

    Posted Nov 2, 2007 12:05 pm PT

    When you ship a game like Hour of Victory, you deserve a lose.

  • lamprey263

    Posted Nov 2, 2007 11:06 am PT

    it's sad to see a company like Midway hurt, especially since they publish some good games

  • thekey

    Posted Nov 2, 2007 9:38 am PT

    Midway made a big mistake not puting UT 2008 on the 360 at the same time.

  • ebookerd1

    Posted Nov 2, 2007 9:23 am PT

    PS3 is helping alot in my opinion. Stranglehold probably sold a ton in Japan. but to me none of these games seem like blockbuster titles anyway so I would picture there sales to drop anyway.

  • DiscGuru101

    Posted Nov 2, 2007 8:46 am PT

    -The PS3 is becoming notorious for delayed nonexclusive games.

  • ldonyo

    Posted Nov 2, 2007 8:46 am PT

    I don't see the PS3 games sales helping Midway at all, given the potential number of units sold. Delaying games for the Wii, on the other hand, has to be incredibly painful.

  • lsny

    Posted Nov 2, 2007 8:22 am PT

    Who would have expected this after the brilliant "Hour of Victory"!?!

    ... ... ...

  • km1498

    Posted Nov 2, 2007 8:07 am PT

    The majority of people will be buying UT3 for the PC so it not being delayed will help them a lot, and the game coming out for consoles is even better for there profits(if it ever comes out for consoles that is).

  • Tnasty11

    Posted Nov 2, 2007 7:55 am PT

    Midway has has said that manufacturing delays of Nintendo's Wii has had a direct affect on the company's roll-out of software to support the machine. In a conference call following the release of the company's Q3 financial results, vice president of publishing Miguel Iribarren said that products for the busy Christmas period have had longer lead times than necessary "The demand for Wii product has put a pretty big strain on Nintendo's production capacity, and that has in turn, for us, turned into longer lead times for some of our Wii products," commented Iribarren.

    http://www.gamesindustry.biz/content_page.php?aid=30213 Gamespot you forgot something

  • vass86

    Posted Nov 2, 2007 7:27 am PT

    "well well all u 360 fanboys do one , the reason games are gteing delayed is the ps3 new and 360- been out over a year and half l"

    no, it's because it's hard to develop for. simple as

  • dorohala

    Posted Nov 2, 2007 7:19 am PT

    Soon everything will be fix and that way thew developers will able to make good games in time for PS3!!!

  • carljohnson3456

    Posted Nov 2, 2007 6:27 am PT

    http://www.n4g.com/News-79529.aspx

    Even Midway says that PS3 tech issues are over. Like we've all been saying - the PS3 is just being figured out. It has been out for 11 months, you cant expect devs to figure out everything about it. I'm not saying it's as easy to develope for as the 360 is, but it's being figured out.

  • wars45 posted Nov 2, 2007 5:13 am PT (does not meet display criteria. login to show)

    wars45

    Posted Nov 2, 2007 5:13 am PT (hide)

    well well all u 360 fanboys do one , the reason games are gteing delayed is the ps3 new and 360- been out over a year and half .just wait till it gets going haze killzone 2 unreal . ps3 is ace best 425 pound i ever spent and reis fall of man 2 lol

  • MetalZombieII

    Posted Nov 2, 2007 4:16 am PT

    @godslim, your right how could anyone like... Mass Effect, Ninja Gaiden 2, Lost Odyssey, Project Gotham Racing 4, Burnout Paradise, Devil May Cry 4, Soulcalibur IV, Assassin's Creed and UT3... I could keep typing names of other bad games coming to the 360, but it hurts when my hand starts to cramp from typing them all.

    You and X360MadMan, both need to grow up.

  • godslim

    Posted Nov 2, 2007 3:16 am PT

    @X360MadMan LOL at the 360 4 having no more good games coming out

  • TheoleDominion1

    Posted Nov 2, 2007 3:07 am PT

    Stranglehold could've been great, but was too limited with gameplay. There have been several games like this that had more gameplay and moves you could pull off. Though added new features like "precision aiming" was great, but not having a variety of hand-to-hand and hand-weapons moves really hurt this game. The game "Path of Neo", which is nearly 3yrs old actually has more depth and gameplay than Stranglehold does. When are developers going to learn, especially with games being shorter now, that you can't just add a few new features with better graphics and expect a game to be truly successful. The concept of "adding by subtracting" doesn't work.

    PS. It's a shame that most Xbox and PS2 games have more substance than the games that are coming out now.

  • X360MadMan

    Posted Nov 2, 2007 1:04 am PT

    LOL delayed`s 4 the PS3. LOL@ the PS3

  • Reetesh

    Posted Nov 2, 2007 12:10 am PT

    Atleast they are not suing Epic

  • GameWiz47 posted Nov 1, 2007 11:22 pm PT (does not meet display criteria. login to show)

    GameWiz47

    Posted Nov 1, 2007 11:22 pm PT (hide)

    my, how pleasent it is seeing 360 fanbots blaming the ps3 for everything when they actually don't bother seeing all that press supporting the ps3.

    and on a second note, the main reason why these devs have a hard time with the ps3 is that they're not putting as much effort as they're supposed to. However, they do know it has alot of potential. Naughty Dog was able to keep Uncharted on track, why can't Midway and EA do it? Its because they stay shifted to making the game work better on one console than the other.

  • hawk-hunter

    Posted Nov 1, 2007 10:27 pm PT

    Too bad for Midway.

    I would like for them to bounce back.

  • demoralizer

    Posted Nov 1, 2007 10:27 pm PT

    They should just drop the PS3 waste of money and long Dev time woes for a small user base.

  • Pete5506

    Posted Nov 1, 2007 10:23 pm PT

    UT3 should help

  • lamprey263

    Posted Nov 1, 2007 9:45 pm PT

    I think their worst move ever was remaking the Hitz and Blitz series into sports sims. If they'd have kept them not that much different than the 2003 versions, with minor upgrades every year, they'd of had a great series they could try pushing every year with little development effort.

    Anyhow, I liked Stranglehold, though, I can see why many didn't want to pay $60 for it, but I don't regret it. Maybe if they'd of tried selling it for $40 a unit it'd done a lot better. If you see it for $20 any time in the near future, give it a shot, it's definitely worth $20.

    Anyhow, just because they're doing so bad, I'll go ahead and pick up a copy of Aqua Teen Hunger Force Zombie Ninja Pro-Am.

    Also, I got Stranglehold for the X360, but I think PS3 owners should be embracing this game, as I do think it's one of the cooler games to grace the system.

  • NeoNavarro

    Posted Nov 1, 2007 9:42 pm PT

    I didn't see the big deal with Stranglehold and after playing it's still not a big deal. I feel like the games been done before and it's nothing new. How could Midway expect a proffit from a Mediocre game like Stranglehold? Even if it was out for the PS3 it wouldn't make that much of impact. (IMO)

  • generaltom

    Posted Nov 1, 2007 8:05 pm PT

    I don't understand how exactly they planned to profit from Stranglehold.

  • ppau08223

    Posted Nov 1, 2007 7:29 pm PT

    i hope that the ut3 will push their outlook for next time.
    all the best guys!!

  • UnchainedPsYcO

    Posted Nov 1, 2007 6:56 pm PT

    I have no problems with delays. But after all those delays and the game finally launches the game is horrible to play. That is what scares me about these delay launches.

  • Misfit1119

    Posted Nov 1, 2007 6:30 pm PT

    Its amazing how people gloat about the PS3 delaying game releases meanwhile DMC4 was delayed thanks to it being ported to the 360. This is what happens when devs focus on one version over others and then have problems along the way. I dont feel bad one whit that most of the major blockbusters are going to miss christmas, I still get my Assassins Creed.

  • Chirico_Cuvie

    Posted Nov 1, 2007 5:59 pm PT

    I see a lot of PS3 port delays as the cause to much of these current problems for companies. If sony doesn't start offering some assistance with the development then companies may think twice about even bothering with a PS3 version.

    Midway was great back in the early years of video games, now it's about on par with Akklaim. Too many missed opportunities from sub-par development. Mortal Kombat stopped being relevant in 1995, Area 51 was never more than a good idea done wrong, starting with a really crappy light gun game. Unreal was not done by them, they bought up Epic so they could at least have some success, and look how great that PS3 version of the Unreal 3 engine is doing - it's a big factor in the PS3 delays.

  • playstation_wii

    Posted Nov 1, 2007 5:53 pm PT

    I don't like delays.

  • andrewhateme

    Posted Nov 1, 2007 5:52 pm PT

    Ok, besides unreal, when was the last time MIdway put out a real good game??? hmmm....i cant think of anything recent.

  • McSpazzotron

    Posted Nov 1, 2007 5:52 pm PT

    Haha PS3. And gold for PC you say! If only I had a not-crap computer. Interesting... Oh, and by the way, gears isn't midway, its epic.

  • andrewhateme

    Posted Nov 1, 2007 5:49 pm PT

    PS3 game delays??? No way!!!!! HAHAHA...dang im glad im not a game developer then id have suicidal thoughts bout programming a game for the ps3. Maybe if sony just makes every single game for the ps3 then at least there small fan base would take the nooses off there necks

  • LockdownLA

    Posted Nov 1, 2007 5:46 pm PT

    lol, first Sony took down Konami and now they are sinking Midway too!!

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