Majesco losses widen
Success of Cooking Mama can't help budget publisher as sliding financials cause shares to tumble in after-hours trading.
Majesco Entertainment wants to be a turnaround story. After a failed bid to become a major publisher of AAA retail games, the publisher circled its wagons, selling off high-profile projects like Ghost Rider and The Darkness in order to pursue the lower-risk, lower-reward world of mass-market casual game publishing. That initiative trimmed the company's losses for a time, and the success of Cooking Mama for the DS certainly seemed like positive indicators for the publisher.
However, today Majesco released its results from its fiscal third quarter (the three months ended July 31), and the figures showed sliding revenues and rising losses over the same quarter the year before. Revenues were down from $12.4 million to $10 million, while the company doubled net losses from $724,000 to $1.5 million. The revenue shortfall was explained by pointing out that last year's third quarter featured the release of Jaws Unleashed, while this year's quarterly release schedule was light. Another factor hurting the company's bottom line was $2.5 million connected to an expected settlement of a class-action lawsuit brought against it by shareholders.
Majesco also bumped down its projections for its full fiscal year, to the range of $50 million to $53 million, down from $56 million to $59 million. The main reasons given for the downgrade were lowered expectations for its new releases, and the delay of Blast Works: Build, Fuse, and Destroy into its first fiscal quarter of 2008 (the three months ended January 31, 2008). Originally set for a fourth fiscal quarter release, Blast Works is a revamped Wii edition of the PC freeware game Tumiki Fighters, and will include support for online features like sharing customized ships and high scores with friends.
The news isn't being welcomed by Wall Street, as Majesco shares are down sharply in after-hours trading. As of press time, Majesco stock was selling for $1.60, down more than 15 percent from its $1.89 close.
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