Majesco Reports Small Profit On Continued Strategic Shift

Troubled game publisher Majesco Entertainment (Psychonauts) has announced its financial results for the second quarter ended April 30, 2006, which included a slight increase over 2005, due to the company's recent strategic shift, showing a slight profit. The company reported second quarter net revenues of $11.6 million, down from $19.9 million reported over the same period in 2005, and gross profit for the second quarter of $3.9 million, a significant decline from the $8.4 million reported in 2005's second quarter. Overall, the Company generated a profit of $839,000 for the quarter, actually slightly up compared to a profit of $189,000 for the second quarter of last year. Majesco indicated that the lower net revenues and gross profits were due to the company's shift in 2005 from premium console games to value and handheld titles, which were partially offset by an increase in international net revenue. "During the second quarter we made significant progress in establishing a solid foothold in the portable games market with the launch of Age of Empires and Guilty Gear Dust Strikers, both for the Nintendo DS,” commented Morris Sutton, Majesco's Chairman and Interim Chief Executive Officer. “We are seeing traction with our products in the third quarter, specifically Jaws Unleashed, which launched at the end of May.” He continued: “Going into the second half of fiscal 2006, we will continue to be prudent with research and development efforts, and work on exploring other incremental revenue opportunities related to emerging technologies and peripherals." However, included in the operating income for the quarter were gains from the sale of the rights and obligations of Teen Titans for the Xbox, PlayStation 2, and GameCube to THQ, another sale necessitated by Majesco's difficult financial state, and negotiated reductions in certain royalties and payables.