Majesco discloses Q3 financial results

Videogames publisher Majesco is expected to re-evaluate its entire business model, following disappointing financial results for the third quarter.

After poor third quarter earnings, Majesco's cash revenues are down to USD 10.3 million, forcing the firm to rely on short term purchase order financing to bring its forthcoming projects to market through manufacturing.

With lines of credit reduced to USD 7.5 million on cash advances and USD 2 million on letters of credit, payment of developer milestones for projects currently in development may cause further headaches for the company in the future. Company executives are currently negotiating for higher lines of credit, but admit that there are no guarantees the negotiations will be successful.

In the same period last year, lines of credit were closer to USD 30-35 million, with figures boasting revenues of USD 34 million and an operating income of USD 3.1 million. Company president Jesse Sutton blamed poor sales and a slump in the market as the industry enters a next generation hardware transitional phase, saying "the lower than expected sales of some of our key products combined with the effects of the upcoming console transition and overall industry softness have made this a very challenging year."

Sutton also stated that the company will "maintain focus on digital entertainment with an emphasis on video games. Our value product line will remain a core part of our business and we will selectively publish frontline titles. Additionally, our strategy includes pursuing low-risk opportunities in the mobile and online markets with our existing intellectual properties as well as new products."

As a result of the poor financial quarter, Sutton claims that Majesco will be re-evaluating its business model in an effort to regain cash revenues and strategically publish frontline titles in 2006.