IP or studio sales won't help SCi finances, says analyst

SCi Entertainment isn't likely to improve its financial status by selling off any of its IP or internal studios to other publishers, according to leading industry analyst Michael Pachter.

The company is in the midst of a "root and branch" financial review following a failed attempt to sell to another media company, which resulted in three senior executives stepping down today.

Although SCi and publishing division Eidos has some of videogamings best-known intellectual properties such as Tomb Raider and Hitman, Pachter believes that other publishers would only be interested in buying if they came at rock bottom prices.

"The lack of a suitor suggests to me that the company has too much baggage to interest a potential acquiror, and most would probably wait for a bankruptcy or distress sale before stepping in," said Pachter, speaking to GamesIndustry.biz

"I don't know that either of these is likely, but it has been the past pattern of behaviour for the major publishers, all of whom watched Interplay, Acclaim, 3DO, Atari and Eidos move toward bankruptcy before bidding on intellectual property."

Despite the glum news surrounding the company, Pachter points out that SCi's properties are strong and a merger with another mid-level publisher might be a possibility, but even then, SCi would likely be sold under value.

"Their intellectual property has tremendous value, arguably well above the market cap of the company, so if someone was interested in buying the IP, I suppose an argument could be made in favour of a merger," detailed Pachter.

"The company's Hitman, Lara Croft and Kane & Lynch assets are worth a lot, and even older franchises like Deus Ex and Thief still have some value.

"Companies like THQ or Take-Two could use them to bolster thin owned portfolios, but I don't see either making a move unless the assets are offered well below their fair market value," he concluded.

SCi Entertainment is expected to announce the results of its internal review to shareholders in February.