Tecmo socked by DOA4 delay

Xbox 360 fighting game's tardiness hurts 2005's earnings; 2006 profits and revenues projected to decline.

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Today, Tecmo reported its consolidated results for the 2005 fiscal year ended December 31, 2005, and the company managed to pull in more money for the year but less profit. The company's net sales were up 4.3 billion yen ($36 million) to 12.2 billion yen ($103 million) compared to the same period last year. However, its operating income fell 327 million yen ($2.76 million) to 850 million yen ($7.17 million), and its net profit plunged 817 million yen ($6.89 million) down to 617 million yen ($5.21 million).

Though the company also runs pachinko and mobile operations in Japan, Tecmo attributed the shortcoming in earnings mainly to its gaming operations, with an untimely delay of an anticipated game being the main culprit.

Originally scheduled for a simultaneous release with the launch of the Xbox 360 in North America on November 22, Dead or Alive 4 faced multiple delays and did not arrive on shelves until December 29, making most of its sales slip into FY2006. Tecmo shipped 700,000 copies of DOA4 in its first two months in retail.

The fighting game wasn't the only source of blame, though. Titles such as Tokobot (PSP) and Monster Farm 5 (PlayStation 2) performed well below predictions.

Looking ahead, Tecmo plans to release a total of 13 game titles this year, which is seven less than in 2005.

While Tecmo's core operation has been console games up until now, the company plans to reorganize and balance its business structure between its pachinko/pachislot software, online game, and mobile content divisions in the future. With mobile and online divisions, Tecmo plans to strengthen its ties with game service providers and expand from a game publisher to a content provider.

For FY2006, Tecmo forecasts sales of 11.8 billion yen ($99.6 million, down 3.8 percent) and net profit of 550 million yen ($46 million, down 10.8 percent).

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