Atari drops financial guidance as DRIV3R slips to FY2005

Publisher Atari has warned that its third quarter results will not meet the company's expectations and downgraded its financial projections for the full year following the decision to move key title DRIV3R to next financial year.

Net revenues for the third quarter, which ended on December 31, are expected to be around $190 million, with profits of between $20.5 million and $22.5 million - down from the guidance announced in early November, which saw profits of $28 to $36 million on revenues of $215 to $235 million.

For the full year, which ends on March 31, the company expects revenues of $460 to $470 million - $100 million off its November projection of $560 to $570 million - and has downgraded its income guidance to break-even from an original projection of a $35 to $45 million profit.

That full-year income figure doesn't include a one-time non-cash dividend which relates to the recapitalisation of the company in September, which will amount to $39.4 million and drive Atari into loss for the full year.

It was originally expected that DRIV3R, the third title in the popular Driver franchise developed by Reflections, would ship towards the end of March, thus bringing it within the 2004 financial year. However, Atari now expects that the game will not arrive until June 1st, in Q1 2005.

Regarding the poor performance in Q3 (final figures for which will be released on February 2nd), CEO Bruno Bonnell noted that several titles in the company's Christmas line-up simply didn't live up to expectations. "The strong performance of franchises such as Dragon Ball Z combined with a solid start for several of our holiday releases was unfortunately not enough to offset the underperforming consumer acceptance of other titles in our holiday line-up," he commented.

The rest of the financial year looks fairly uninspiring for Atari, with only Unreal Tournament 2004 (PC) standing out as a major title on the release schedule, although the arrival of Unreal 2: The Awakening on Xbox at long last will probably drive a few sales. Beyond that, Trivial Pursuit: Unhinged (PS2, Xbox) and Backyard Baseball 2005 (PS2) are the company's main titles for the coming quarter, with neither particularly likely to set retail alight.

"Looking further ahead, fiscal 2005 will now include DRIV3R and several exciting new properties such as Transformers, Shadow Ops, Duel Masters, and Sid Meier's Pirates!," stated Bonnell, "which will join a roster that will also feature new titles from our Dragon Ball Z, Dungeon & Dragons, Terminator, and Backyard Sports franchises. It is a compelling release slate that we believe will meet the demands of the consumer audience."