Midway halves Q2 losses, delays BlackSite, Wheelman

Publisher cuts shortfall to $14.3 million on heels of Wii Mortal Kombat and Lord of the Rings Online launches; sci-fi shooter pushed to November 5, Vin Diesel vehicle now due in '08.

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Though Nintendo continues to reap record profits from the Wii phenomenon, the spring of 2007 will go down as a painful period for many third-party publishers. Yesterday, THQ and Electronic Arts both reported losses for the April-June quarter. Today, Midway Games followed suit, reporting a $14.3 million net loss on $31.8 million of net revenue for a $0.16 loss per share. That's less than half the $31 million the Chicago-based publisher lost during the same period in 2006.

Midway's shortcoming comes on the heels of several high-profile second-quarter launches. With solid reviews, The Lord of the Rings Online: Shadows of Angmar sold over 172,000 copies during the quarter, including the special edition of the game. (GameSpot originally reported erroneous NPD Group data putting the number at 71,000 units, and regrets the error.) Meanwhile, the Wii edition of Mortal Kombat: Armageddon only moved about 38,500 units, and the critically drubbed Hour of Victory sold just 16,456 units at retail domestically.

Unsurprisingly, Midway president and CEO David Zucker stressed Midway's third- and fourth-quarter lineup, which features a trio of the year's most anticipated titles. "The response to our 2007 line-up at E3 was overwhelmingly positive, and we believe this sets the stage for our upcoming releases of Stranglehold, BlackSite: Area 51, and Unreal Tournament 3," he said in a statement.

In an often-frank interview with GameSpot prior to this year's E3, Zucker doggedly dodged questions regarding The Wheelman, which Midway promoted heavily at E3 2006. The reason for that became clear during this morning's postearnings conference call, when Zucker revealed the driving action game had been pushed back to 2008.

The delay removes the Wheelman from the jam-packed 2007 holiday season, which will see dozens of lower-profile games take on such titans as Halo 3, Grand Theft Auto IV, Rock Band, and Crysis. However, Midway also announced it is moving BlackSite: Area 51 into that very fray, bumping it from its September release. "Our expected release dates for BlackSite: Area 51 on all platforms are October 26th in Europe and November 5 in North America," said Zucker, who also promised a "full demo in the next few months for Xbox Live, PS3 and PC."

Speaking with analysts, Zucker portrayed the delays as part of Midway's long-term next-generation push, which he said will kick off with Strangehold's release on August 27. "We believe we're putting in place the systems, tools, processes and talents for high-developed high-quality next generation games spanning a wide variety of mass market genres," he said, promising more 2008 announcements soon.

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