Midway Indicates Larger Loss, Blames Costs

Major game publisher Midway reported a relatively disappointing net loss of $22.6 million for the 2006 first quarter ending March 31, compared to a net loss of $16 million for the previous year, as the company continues to concentrate on the development of next-gen titles. However, despite the loss, the company reported that first quarter revenue grew by 11 percent to $15.4 million, with releases including NBA Ballers: Phenom for Xbox and Midway Arcade Treasures: Extended Play for PSP. The company expects the loss to continue into the second quarter, with a net loss of about $32 million, stemming from about $25 million in revenue. This is up significantly from analyst predictions of a net loss of $19.4 million during the second quarter, according to an Associated Press report. For all of 2006, the report indicates that Midway expects to post a loss of nearly $66 million, a fairly hefty amount, including $3 million of stock-option expense, from just $155 million in revenue. David F. Zucker, president and chief executive officer, 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." The company today announced the titles that it would feature next week during E3, many of which are being developed for each of the next-gen platforms.