SouthPeak breaks even for third quarter
My Baby sells 1m; lower margins on Nintendo titles hit gross profit
3D Dot Game Heroes publisher SouthPeak has reported a small profit of $192,000 (£132,600) for the third quarter ended March 31, compared to a loss of $692,000 (£478,000) for the same period last year.
With a focus on the Nintendo markets, it has sold over one million copies of DS game My Baby in the US, but the company pointed to lower prices for Nintendo formats for a decrease in gross profits to $413,000 (£285200), compared to $5.3 million (£3.6m) in 2009.
Net revenues were down from $13.5 million (£9.3m) to $7.5 million (£5.1m), off the back of releases including Blood Bowl, Risen and Prison Break.
"The decrease in revenues was primarily due to a decrease in the number of titles released and fewer units sold for next generation platforms Xbox 360 and PS3, which sell at a higher MSRP compared with Nintendo DS and Wii," said the company.
The publisher said it has also resolved its legal issues with CDV Software Entertainment AG for which it has put aside $3.2 million.
"In conjunction with our previously announced strategy, we limited the number of titles released for the third quarter to better align our activities with the current retail environment and broader gaming industry," commented Melanie Mroz, CEO of SouthPeak.
"While this impacted our sales, we believe this conservative strategy will enable us to more effectively compete among the current market conditions while continuing to maintain tight control of our expenses. We continued to reduce our operating expenses and have maintained a tight rein on our costs, and are delighted to have achieved break-even for the period."