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Majesco Missteps Bring $5.2 Million Q3 Loss
by Leigh Alexander [PC, Console/PC]
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September 16, 2009
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Neither Majesco's Go Play line or its Night at the Museum: Battle of the Smithsonian met the publisher's expectations, and banking on them too heavily helped create a $5.2 million loss in its fiscal third quarter.
The loss opened up even despite increased sales -- sales were up 19 percent to $17.2 million, compared $14.5 million in the same period last year.
"Night at the Museum was an opportunistic pick-up only a few months before its release," explained Majesco CEO Jesse Sutton on the company's call to investors. "If it performed well, [it would have increased] our gross profit. However, its performance was softer than what we had targeted."
The company also spent $4.2 million on marketing initiatives, an investment intended to aid profitability that instead harmed it.
"We supported [Go Play's] launch with marketing to try to establish the brand," said Sutton. "The trade-off here is that if you don’t have a license with a natural consumer draw, some level of marketing investment is necessary. In retrospect, unlike 2008, this summer was weak industry-wide, and... we were disappointed by the performance of both Go Play titles."
Majesco increased its expectations for the fiscal year to the $85 to $90 million in revenue range, banking on the holiday release slate and its upcoming Jillian Michaels Fitness Ultimatum, a Wii fitness title starring the popular television personal trainer from The Biggest Loser program.
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