Mad Catz Sees Sales Fall On Slow-Starting Holiday Season

Accessories maker Mad Catz, which develops peripherals for games like Street Fighter IV fighting game sticks and official Rock Band guitars and basses, saw its sales fall 16.1 percent year over year to $21.6 million in its second fiscal quarter, which ended September 30. The company claims North America as its largest market, and in that region alone, sales declined 18 percent -- sales actually rose 55.3 percent in Canada, but were offset by a 19.6 percent decline in U.S. sales. Sales in Europe were down 14.6 percent year over year. Despite the sales decline, Mad Catz managed to cut its operating expenses, thereby narrowing its operating losses to $0.2 million from $0.8 million a year ago. Net loss during the quarter was $1 million, due to income tax expenses. The company saw gains in its gross sales of PlayStation 3, Xbox 360 and PC accessories, likely in part due to Street Fighter IV's success, while Wii and all other platforms declined. President and CEO Darren Richardson said the sales declines over the quarter were due somewhat to a delayed holiday ramp-up; normally, he says, the company starts seeing increased sales late in September rather than in late October. He also cited "overall industry sluggishness" ahead of the late-quarter hardware price cuts, and noted that Mad Catz's Wii accessories in particular were hit by a lack of new products, as compared to last year's Wii Fit accessory sales. Finally, exchange rate fluctuations impacted Mad Catz's European performance, the CEO said. "While the consumer spending environment remains challenging, we believe there are several factors which will contribute to video game industry sales this holiday season, including the attractive entertainment value proposition of PC and video games, the recently-lowered video game console prices and a strong pipeline of key title launches," Richardson commented. The company is launching a range of Call of Duty: Modern Warfare 2 peripherals alongside the game's release, as well as a Marvel vs Capcom 2 fighting stick and official Xbox 360 and PlayStation 3 wireless network adapters.