Majesco Q3 Sales Dip, Enhanced Blast Works Moves To Q1 Fiscal 2008

Publisher Majesco has released the results of its third quarter showing sales down slightly to $10 million, 74 percent of which was on handheld systems, as the Kenta Cho Wii exclusive port Blast Works gets online leaderboards and user created level sharing but slips into Q1 of the next fiscal year. Majesco chalks the decrease in sales from $12.4 million the year prior is due to a "light release schedule in the third quarter of 2007, compared to the release of JAWS Unleashed in the third quarter of 2006." Sales were broken down as 62 percent from new titles and 38 percent of its back catalog. 25 percent of sales came from console releases, 15 percent alone from the Wii, while 74 percent came from handhelds, 66 percent of that from the DS. The first three quarters of fiscal 2007 alone has seen $39.1 million in sales, down from $45.2 million in 2006, "primarily attributable to the company’s shift away from publishing higher priced games in 2006 and a light release schedule in the third quarter of 2007." The company also realized a $2.5 million charge related to a class action lawsuit in its second quarter, leading to Q2 losses of $1.3 million. In a conference call with investors at the time, company officials said the $2.5 million would be paid in company stock. For the fourth quarter, Majesco plans to ship The Wild West, Turn It Around, Operation: Vietnam, Zoo Hospital, Nancy Drew and the Deadly Secret of Olde World Park, Holly Hobbie & Friends and Fish Tycoon for the DS, as well as Kengo: Legend of the 9 for the Xbox 360. It will also release The New York Times Crosswords, Cake Mania DS, Operation: Vietnam, Toon-Doku and Kengo: Zero internationally. The Wii exclusive port of Kenta Cho's side-scrolling shooter Tumiki Fighters first announced in June has slipped from the quarter to Q1 of 2008, but the delay will see the addition of new features, including "the sharing of custom ships, levels and high scores with friends via WiiConnect24." Q1 will also see the release of Cooking Mama 2: Dinner with Friends, Mega Brain Boost and the recently announced Eco Creatures: Save the Forest for the DS, as well as Furu Furu Park for the Wii. Said interim CEO Jesse Sutton, "During the third quarter, we accomplished important operational milestones, positioning us for future growth. We continued to reduce expenses, prepared our line-up for the holiday season, and shipped six titles internationally. While our nine-month GAAP operating loss was $2.3 million, our nine-month non-GAAP operating results were almost breakeven and improved more than $5.0 million compared to last year." "As announced in August," he continued, "we have exceeded sales of 500,000 units of Cooking Mama for the DS since the game’s launch almost a year ago. This franchise has proven to be attractive to our target market, and its success reinforces our content and platform strategy. To further leverage the success of the Cooking Mama brand, we secured the rights to Cooking Mama 2 for the Nintendo DS and Wii platforms. We are very excited about these games, and expect them to be a cornerstone of our 2008 product portfolio.” [UPDATE: Majesco executives revealed little more information in their call with investors, but did add, in response to an analyst question, that expectations for Cooking Mama 2 were that it would perform as well as the original, even with its higher price point of $29.99, tied to its "significant improvements over the original version." "There's no underscoring how valuable Cooking Mama is for us," said Sutton, adding that "without a doubt" the company would see as much support from both Nintendo and retailers on the game's release. The downloadable DS demo has been made available as of this month, he added, and has thus far been met with warm reception. Though Majesco did lower its full year guidance to $50-53 million from the original $56-59 million, no one at the publisher would give a specific title-by-title reason, apart from the shift of Blast Works to Q1 2008 and a general sense of "lowered expectations for some of the company’s fourth quarter titles."]