Midway losses lessen

By Tor Thorsen, GameSpotPosted Feb 22, 2007 5:13 pm PT

Lower expenses, higher revenue help Mortal Kombat-maker boost Q4 net revenue by 38.8 percent; publisher still down $77.8 million for year.

In 2005, the holidays brought little joy for Midway Games. The once mighty publisher had a terrible calendar and fiscal fourth quarter, losing $37.8 million ($0.42 per share) in just three months.

One year later, the story was very different. For the quarter ending December 31, 2006, Midway managed to trim its net loss to just $2.0 million ($0.02 per share). Net revenues were up 38.8 percent, going from $69.8 million to $96.9 million.

The upswing was in large part due to the success of the multiplatform film tie-in Happy Feet, which shipped a combined total of 1.8 million units worldwide. Also contributing were the PlayStation 2 and Xbox editions of Mortal Kombat: Armageddon, which sold a combined 563,379 copies domestically in 2006. Worldwide, the fighting game topped 1 million copies sold.

"The fourth quarter of 2006 was a landmark quarter for Midway," Midway president and CEO David Zucker said in a statement. "Our largest revenue quarter in seven years included our largest initial ship-in for a single title, Happy Feet, the culmination of our marquee franchise Mortal Kombat on current-generation systems, and the kickoff of our next-generation releases with Blitz: The League on Xbox 360 as well as four Wii titles." The Wii titles in question were Happy Feet, The Ant Bully, Rampage: Total Destruction, and the Grim Adventures of Billy & Mandy.

Another factor in Midway's lowered losses was its reduced development and marketing costs. After spending $33.1 million in the last quarter of 2005, the company shrunk its budget to just $24.2 million during the same period in 2006.

Despite a banner fourth quarter, Midway still had a relatively rough year. For the 12 months ending December 31, 2006, the company lost $77.8 million ($0.86 per share), $3.3 million of which was due to expenses related to stock option grants. Still, that was a major improvement over 2005, which saw the company hemorrhage $112.8 million ($1.30 per share).

Midway's share price slid in after-hours trading; as of press time it had sunk $0.22 (2.86 percent) to $7.47 on the Nasdaq.

24 Comments

  • Evanrocknuma

    Posted Apr 19, 2007 2:27 pm PT

    Yo Midway said they ended the mortal kombat series with armageddon... but they did say they will make a "sequal" to mortal kombat with entirely new charecters and gameplay so does anyone know when this is coming to next gen and what its name will be?
    Email this to my acc. plz

  • Feanaro_basic

    Posted Feb 25, 2007 12:18 pm PT

    Eight games for a million a piece jknight? That's a riot. The article, if you had bothered to read it, clearly states that the development and marketing costs for Midway totaled 24 million dollars. Running a business is expensive.

  • anamnawshad

    Posted Feb 24, 2007 10:26 am PT

    I gotta buy MK: A!

  • anarchicgoth

    Posted Feb 24, 2007 10:16 am PT

    Maybe Billy and Mandy, Ant Bully, and Happy Feet werent good ideas after all! Maybe they should push out Stranglehold! Come on! This is Midway! Home of Mortal Kombat not fricken Penguins!!!!!

  • theKSMM

    Posted Feb 24, 2007 6:52 am PT

    It's a darn shame that a once-noble brand like Midway is now dependent upon catering to pre-adolescent casual gamers with a heavy reliance on tie-ins. I don't know if any of those movie/TV-based games was worth purchasing.

  • Ionizza

    Posted Feb 24, 2007 2:18 am PT

    go mortal kombat!

  • Sharvie

    Posted Feb 23, 2007 1:41 pm PT

    That suck what are they spending it on.

  • jknight5422

    Posted Feb 23, 2007 12:35 pm PT

    What in sam hell are they spending their money on to lose
    so much of it? If they only produced 8 games at a million
    a piece, that isn't $80 million. Sounds like some execs
    are helping themselves to the investment stash.

  • fullmetalsonic

    Posted Feb 23, 2007 9:21 am PT

    mk is one of the best games i played but some time good things come to an end...midway will think of someing

  • Rect_Pola

    Posted Feb 23, 2007 8:02 am PT

    Weren't most of the Happy Feet games awful?

  • Doolum

    Posted Feb 23, 2007 7:41 am PT

    there are better days ahead

  • Doolum

    Posted Feb 23, 2007 7:41 am PT

    there are better days ahead

  • gmax Site moderator

    Posted Feb 23, 2007 6:32 am PT

    Yep. Midway's doomed. The executives will suck it dry and then when they pull the rip cords on their golden parachutes you'll hear about it being sold off... Very predictable, sadly.

  • SimonM7

    Posted Feb 23, 2007 4:54 am PT

    Midway publish UT3 though, so they'll still be making money off of it.

  • RaiKageRyu

    Posted Feb 23, 2007 1:01 am PT

    RE:bossjimbob

    Epic Games is resposible for Unreal Tournament, not Midway.

  • bossjimbob

    Posted Feb 22, 2007 8:56 pm PT

    When Unreal Tournament 3 comes out they'll be making some serious cashish.

  • comthitnuong

    Posted Feb 22, 2007 8:05 pm PT

    They need a new Blitz. I wish they still had the NFL license to make one with official NFL teams though.

  • Pete5506

    Posted Feb 22, 2007 7:29 pm PT

    lol.................poor midway

  • Neo9898_98

    Posted Feb 22, 2007 7:07 pm PT

    Maybe Mircosoft willl buy another doomed Developer... we have another Rareware situation on our hands.

  • godzillavskong

    Posted Feb 22, 2007 6:53 pm PT

    Midway has some pretty big titles coming out this fall.Stranglehold looks awesome and that should sell fairly well.

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