Midway reveals Q1 losses, further short-term decline expected

Midway has revealed a loss of USD 22.6 million in its first quarter financial results,, but has gained a marginal revenue increase of 11 per cent compared to the same period in 2005.

Net revenues for the quarter were posted at USD 15.4 million, an improvement on last year's USD 13.8 million during the first three months of the year. The company attributes the increased loss - at USD 22.6 million compared to 2005's USD 16 million - to increased development costs as the publisher continues its focus on next-generation software titles.

David F. Zucker, Midway president and CEO, commented: "We are pleased to report that we made progress during the first quarter toward our operating objectives for 2006. First quarter results were consistent with our guidance and Wall Street expectations, and during the quarter, we continued to extend our presence overseas, grow new potential revenue streams such as dynamic in-game advertising, and broaden our support for the new console platforms."

Looking forward, Midway expects further losses in the second quarter, anticipating revenues of approximately USD 25 million and a net loss of approximately USD 32 million. For the full year ended December 31st 2006, the company is projecting revenues of USD 155 million, with a not insignificant net loss of USD 66 million.

"Although 2006 continues to be a transition year for the industry, we are committed to showing modest revenue growth in spite of the overall industry downturn," Zucker added. "We are focused on our goal of increasing our market share early in the new console cycle. To that end, we are concentrating our resources on developing what we believe will be some of the best technology and highest-potential intellectual properties in the industry for the next generation consoles."

The publisher has announced a line-up of almost fifteen titles which will be on display at the forthcoming E3 expo, the majority of which are being developed for PC, handheld and multiple next-gen console platforms.

"Our 2006 E3 line-up truly reflects our product strategy to broaden our portfolio and commit our resources to developing titles in a wide range of genres on all major platforms," Zucker stated. "From proven brands like Mortal Kombat and exciting next generation games such as John Woo Presents Stranglehold, this is Midway's most diverse and powerful line up yet."