Majesco exits premium console games market

Embattled software publisher Majesco Entertainment has posted its full-year fiscal results, revealing a continued decline in revenues that has prompted the firm to exit the premium games market, focusing instead on budget and handheld software titles.

The fourth quarter was particularly damaging for Majesco, generating just USD 4.6 million in revenue, compared to USD 45.3 million for the same period in 2004. Operating loss for the quarter was posted at USD 34.4 million, as opposed to the operating income of USD 5.6 million in 2004. Net loss for the fourth quarter 2005 was USD 34.2 million - a marked decline from 2004's USD 16.2 million net income.

Whilst the fourth quarter was especially low for Majesco - at a time when general industry sales experienced a widespread retail slump - the company's financial stability has been waning over the entire year, following poor sales of a number of high profile titles.

For the full fiscal year ended 31st October, 2005, Majesco posted revenues of USD 59.7 million - less than half the USD 121 million for the previous year. Operating losses were posted at USD 70.2 million, with net loss reaching USD 70.9 million, compared to a relatively minimal net loss of USD 11.2 million the previous year.

As a direct result of the financial results, Majesco is re-evaluating its position in the market, with the intention of focusing on budget and handheld titles to reduce development and marketing expenses associated with premium and next-generation console titles.

Jesse Sutton, President of Majesco Entertainment commented: "This has been a difficult year for Majesco. We entered the premium console market with high expectation for success, but as a result of a variety of factors we were not able to meet our expectations. Recently, we evaluated our product portfolio and have sold or cancelled most of our premium console titles that were scheduled for release in 2006 and beyond."

The company sold off two of its premium console titles last year, and it is expected that the majority of current and planned full-price games - including movie inspired Taxi Driver and Demonik - will now be sold or have development cancelled completely.

"Publishing value priced software and games for handheld systems has historically been one of our strengths. We believe that this strategy is more prudent for Majesco at this time and offers us the most opportunity for success as it requires a relatively low investment in development and marketing," Sutton stated.

In addition to its exit from the premium games market, Majesco recently undertook an internal restructuring exercise, reducing its staff count by twenty per cent. It is hoped that the more streamlined operation, combined with the cancellation of costly titles and a shift in focus to low investment budget software will be sufficient to reclaim some of the firm's substantial losses in 2005.

"We have been in business for almost twenty years and have endured many cycles in this business. With a leaner organization, significantly reduced expenses and a new strategy of focusing on lower- investment, value and handheld products, we believe we have a plan that will enable us to enable us to operate our core business and give us greater flexibility to be opportunistic with regard to new products and technologies," Sutton concluded.