Midway posts Q4, year end financial losses

Midway has posted its Q4 and 2005 full-year financial results, revealing a decline of almost ten per cent in net revenues for the quarter and a loss of USD 112.8 million for the year ended December 31st.

Net revenues for the fourth quarter were posted at USD 69.8 million, a drop of 9.6 per cent compared to the USD 77.2 million in net revenues for the same period a year prior. Overall loss for the quarter was USD 37.8 million, a marked decline from the income of USD 17.6 for the same quarter in 2004.

Net revenues for the full year ended December 31st were USD 150.1 million, down 7.1 per cent on 2004. The company reports an overall annual loss of USD 112.8 million, a significant decline from 2004's USD 24.7 million loss. Midway notes that the 2005 results include a USD 10.8 million charge attributed to the company restructuring announced in December, which included the closure of a number of internal development studios.

David F. Zucker, Midway president and CEO, commented: "Midwayâs fourth quarter results reflect the challenging industry environment that has affected nearly all software publishers at this point in the console transition."

Highlights for the quarter centred on sales for the PS2 and Xbox title, Blitz: The League, which received critical acclaim and featured as a top 5 Xbox and top 10 PS2 title in the US during October and November. The publisher's first Cartoon Network game, Ed, Edd and Eddy, also performed well for the company during the quarter.

"We remain focused on making the right decisions to become a top tier publisher in the next generation," Zucker added, maintaining an optimistic approach to the completion of the current hardware transition. "We have expanded our international presence with new sales, marketing and distribution subsidiaries in France and Germany which are expected to contribute to greater sales and better margins in those regions."

"We intend to continue to build new incremental revenue streams through emerging technologies such as dynamic in-game advertising, and through the monetization of our library of intellectual property on platforms such as the Microsoft Xbox Live Arcade for the Xbox 360. We firmly believe that the progress we are making in these areas is laying the foundation for long-term success as we enter the next console cycle," he concluded.

For the first quarter 2006, ending 31st March, Midway forecasts a 3 per cent revenue growth, and anticipates net revenues of approximately USD 13 million, with a net loss of approximately USD 22 million. The extension of existing franchises on new platforms, in addition to its extensive investment in next-generation software and licensed, branded titles is expected to drive the company back to profitability over the coming year.