Midway Q4 Losses Down, Reveals Next-Gen Mortal Kombat

Major Chicago-headquartered game publisher and developer Midway Games announced its financial results for the fourth quarter and full year ended December 31, 2006, noting lower losses over the previous year coupled with higher overall revenues. For the quarter, the company reported sales of $96.9 million, up 38.8 percent from the $69.8 million reported for the same period in 2005, as well as a quarterly loss of $2.0 million. The loss was down significantly from the $37.8 million loss posted during fourth quarter 2005. For the entire year, Midway posted revenue of $165.6 million, up 10.3 percent from $150.1 million from the prior year. The company also reported a loss of $77.8 million, compared to a loss applicable to common stock of $112.8 million in 2005. “The fourth quarter of 2006 was a landmark quarter for Midway,” commented David F. Zucker, Midway's president and chief executive officer. “Our largest revenue quarter in seven years that included our largest initial ship-in for a single title, Happy Feet; the culmination of our marquee franchise Mortal Kombat on current generation systems; and the kick-off of our next generation releases with Blitz: The League on Xbox 360 as well as our four Wii titles.” Looking ahead to the coming year, Midway expects revenue of nearly $7 million for the first quarter, while officials look forward to a a substantial revenue growth of approximately 36 percent to $225 million for the entirety of 2007. Midway has a considerable catalog of high profile titles that are expected to launch for multiple plaforms in 2007, including the Wii version of Mortal Kombat Armageddon, as well as Stranglehold, BlackSite: Area 51, The Wheelman, The Lord of the Rings Online, and Unreal Tournament III. Commenting on the company's outlook, the executive noted: “Midway has made considerable progress since we embarked on our aggressive plan several years ago to revitalize the company. We believe our significant investment in building unified next generation technology and tools, expanding our sales and marketing resources both domestically and internationally, and instilling a culture of quality and innovation throughout the company position Midway for the growth we are projecting for 2007 and beyond.” [UPDATE: In a call with investors, when asked if the company planned to shift resources to the Wii in the light of recent sales, Midway officials also noted that the publisher had been "bullish" on the Wii since the launch of the console, but that the company had undertaken a "small shift to look more significantly at the Wii going forward," including two yet unannounced titles for the second half of 2007. Officials noted that the Wii was "growing to a large install base rather quickly," and that the "lower development costs compared to the Xbox 360 and PS3" presented the console as an attractive option. Talking specifically about Mortal Kombat Armageddon, Zucker also revealed that developers are “hard at work on a next-gen version of the franchise, with an all new fighting system redesigned from the ground up leveraging our common technology base.”]