|
 News
Week
of October 23 - October 29, 2000
[Thursday,
October 27, 2000]
Sega
Expects Losses
Sega Enterprises is expecting to post a loss for this fiscal year. Previously
the company had anticipated posting a profit of 1.5 billion yen ($13.8
million), which would have made the fiscal year ending March 31 the first
profitable one for Sega in four years. The company instead revealed that
U.S. and European price cuts would help reduce earnings by 18.5 billion
yen ($170.6 million), as Sega was unable to scale back Dreamcast production
costs to compensate for last August's $50 drop in the console's price.
Until the full results are announced, Sega is hoping to quell concerns
over the company's performance by revealing a new strategy to bring its
software to rival consoles. Sega's Hideki Sato, who is slated to become
COO of the company November 1, declined to offer any details on the plan,
saying only that the company is "already in talks with a few foreign firms."
Viva
Konami
Konami is headed to Vegas with a new license to make gambling devices
for distribution to casinos. The deal could bring as much as 15 million
yen selling TV-based 3D poker and slot machines to gambling institutions
in Nevada and Mississippi as soon as this December with its first game
Simply Poker, with the ultimate goal of securing 20 percent the
market. Konami also has its sights set on other U.S. states with legalized
gambling, including California and Indiana. Should Konami strike deals
in those states, the company will move production from its Kanagawa, Japan,
plant to Las Vegas.
[Thursday, October
26, 2000]
EA
Financials
Electronic Arts is posting a loss in the second quarter, but it's smaller
than expected. Second quarter revenues came in at $219.9 million, a significant
dip from revenues of $338.9 million in the same period last year. Consolidated
net losses total $35 million, compared with a profit a bit more than $20
million in the second quarter a year ago. EA is placing the blame on slow
sales and decline consumer interest in Playstation and N64 titles. "As
anticipated, the second quarter was a challenging quarter as we moved
through the seasonally slow summer prior to the introduction of Playstation
2," said EA's Larry Probst.
Sony
Slump
The Playstation 2 is selling faster than Sony can ship it, but cost of
the console's launch and a strong yen are weighing on the company's bottom
line. Sony saw its group net profit fall more than 57 percent in the July
to September quarter to $183.2 million, about half of the what the company
had been expected to earn.
Midway
Losses
Midway Games is taking a big revenue hit. The company is reporting that
revenues for the first quarter of 2001 fell nearly 56 percent to $47.3
million versus last year's first quarter revenues of $106.6 million. That
decline in revenue translates to a loss of $9.9 million, compared to net
income of $11.3 million in the same period one year ago. Midway hopes
to quickly rebound from the disappointing numbers as next generation console
game sales increase.
[Wednesday, October
25, 2000]
PS2
Launch
Sony's Playstation 2 is finally available in the United States, but not
online. The company is hoping to offset an initial shortage of available
Playstation 2 units by delaying plans to offer the console for sale on
its Playstation.com website. Sony will make the units earmarked for the
web available to retailers instead. "By choosing to postpone the
PlayStation.com e-commerce launch, we are demonstrating that our priority
is to support our retail partners and, ultimately, consumers who rely
upon their local storefronts to purchase PlayStation products," said
Sony's Jack Tretton. Sony expects to ship a total of 1.3 million units
in the next two months.
3DO
Results
3DO's second quarter revenues are up, but so are losses. The company reports
revenues of $22.9 million for the second quarter, and increase of 11 percent
from last year's second quarter revenues of $20.7 million. Net losses
reached $15.2 million, compared to second quarter net losses of $5.9 million
this time last year. "We were pleased with the quarter and our revenue
and the operating loss were in line with our expectations," said
3DO Chairman Trip Hawkins, "We expect margins to improve as we enter
the second half, due to decreases in the price pressures we have experienced
in the first half, and a shift in mix to higher margin products."
Blix
Finds a Home
2000 Independent Games Festival award winner Blix is coming to
Shockwave. The first 100 level of the puzzle game, which won an award
for best audio at last year's Indie Games Festival, will debut exclusively
at Shochwave.com. "Our goal at gameLab is to see digital entertainment
become a mass medium like film or music," said Eric Zimmerman, CEO
of Blix creator gameLab, "Shockwave shares this vision, which
is why for us it's a perfect collaboration."
3D
Labs Stock Buy
The 3D Labs board of director has authorized a stock re-purchase plan.
The board is looking to buy back as many as one million shares of its
outstanding common stock, with the actual amount of the re-purchase and
the timing of the buy subject to market conditions and stock price. "Based
on current market prices, we believe that our stock is undervalued and
that the re-purchase program is a good investment of available funds.
This stock re-purchase program reflects our confidence in the Company,"
said 3D Labs CEO Osman Kent.
[Tuesday, October
24, 2000]
THQ
Profits
THQ is reporting quarterly earnings that top forecasts but fall below
last year's results. The company had revenues of $53.3 million in the
third quarter, up from $44.3 million in the same period last year, with
net income reaching $2.4 million. Last year's third quarter earnings were
$4.7 million. THQ's third quarter earrings exclude a one-time charge of
$5.9 million related to the company's purchase of Volition. THQ President
Brian Farrell predicts a bright future for the company after this year's
soft game sales, "We're at the beginning of a new five-year huge
wave in video games. It's a tsunami potentially. Our strategy has been
to keep shipping younger mass-market titles and position the company across
various platforms."
Student
IGF
The Independent Games Festival will showcase student game projects. Digipen
and the CMP Game Media Group are sponsoring a student showcase at the
third annual Indie Games Festival. The IGF Student Showcase will give
five top student development teams the chance to travel to this year's
GDC in San Jose to demonstrate their work at the festival. "The Festival
setting encourages developers to take risks and come up with new ideas,"
said IGF Founder Alex Dunne, "With the addition of the Student Showcase,
talented young people increase their chance for exposure." Entry
must be received by January 10; more details are available at the
Indie
Games website. Seattle's Sputnik game development group will decide
which entries make the cut and travel to San Jose. The Independent Games
Festival is produced by the CMP Game Media Group, publishers of Gamasutra.
3dfx
CFO
3dfx Interactive is naming a new CFO. Richard Heddleson, formerly chief
financial officer at Evoke Software, will take on 3dfx's top financial
management job. "Heddleson's unique combination of financial expertise
as well as strategic business management skills will be extremely valuable
to 3dfx as we move forward with plans to expand our business," said
3dfx CEO Alex Leupp.
[Monday, October
23, 2000]
Sony
Not Holding Back
Sony is angrily denying intimations that it intentionally created a Playstation
2 shortage for the console's launch. Sweeping aside increasingly common
Tickle Me Elmo and Cabbage Patch Kid comparisons, SCEA's Andrew House
remarked to Time magazine, "It's absolutely ridiculous to suggest that
by limiting our audience we would successfully be pursuing our business
goals." Sony announces its July-September earnings in Japan on October
26, the day PS2 launches in the U.S. Analysts are anticipating flat profits
for the quarter, due in part to the cost of the PS2 launch, a strong yen,
and weak results from Aiwa Co. Ltd., a Sony affiliate.
On the European
front, Reuters is reporting that London stores are closing their books
on getting the new console anytime near the November 24 European launch
date. Demand in Europe is expected to so far exceed supply that retailers
across Europe have agreed with Sony to avoid midnight launch events, fearing
scuffles or other violence could break out among dissatisfied would-be
PS2 owners. Buyers in Europe will instead receive a letter instructing
them when and where to pick up their PS2 between November 24 and December
24.
Activision
Q2
Activision has raised its full-year earnings projections and reported
better-than-expected second-quarter earnings. Co-chairman and chief executive
Robert Kotick stated that the company has raised its full-year earnings-per-share
estimates 7 cents to 63 cents per share, citing the company's strong performance
in the first six months of the year. The company reported net income for
the second quarter of $4.3 million, or 17 cents per diluted share, up
from income a year ago of $1.06 million or 4 cents per share. Revenues
rose to $144.4 million, up from $115.4 million in the same period last
year.
Interplay
Signs MacPlay
Interplay has signed an exclusive worldwide licensing deal for the MacPlay
trademark and MacPlay.com domain to United Developers LLC of Dallas. The
new MacPlay will be a subsidiary of United Developers, and will gain rights
to publish five Interplay titles for the Mac platform, including three
titles for this Christmas, plus Icewind Dale and Baldur's Gate
2: Shadows of Amn sometime early next year.
Front
Line Awards
Participate in Game Developer magazine's Front Line Awards by voting
for the winners! The Front Line Awards honor the most innovative game
development tools of the previous year. If you are a professional game
developer, you can vote among the nominees to help select this year's
winners. Cast your vote here!
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