Midway Releases Q4, Yearly 2004 Financial Results

Midway Games Inc. is the latest company to sound off on its performance during the October-December financial quarter of 2004, which marks the fourth quarter by its fiscal calendar. Due to strong performance of its year-end titles, the holiday season was the first profitable quarter for the formerly struggling videogame publisher in five years; compared to Q4 2003, revenue went up by 156%, from $30.1 million USD in 2003 to $77.3 million USD in 2004. During the fourth quarter, the company released Mortal Kombat: Deception for PlayStation 2 and Xbox, and Midway Arcade Treasures 2 for PlayStation 2, Xbox and GameCube. During the quarter, three games surpassed the one million units shipped milestone (worldwide): Mortal Kombat: Deception, NBA Ballers, and Midway Arcade Treasures. The company has revised its expectations for FY 2005, and now expects revenue to rise 40 percent to $225 million over the course of the year. However, the company still projects an overall net loss of around $38 million; even with the profitable Q4 2004, Midway still posted a yearly net loss of $19.9 million USD, though that was an improvement on its 2003 net loss of $115.2 million. "Our 2004 fourth quarter results cap a year of progress at Midway which has positively repositioned the Company for the future," commented President and Chief Executive Officer, David F. Zucker. "By focusing on improving our key operating functions such as product development and marketing, Midway produced much higher quality games and generated much better visibility and demand for our games in 2004." Going forward, the burgeoning company will release Mortal Kombat: Deception for GameCube and the budget-priced NARC for PlayStation 2 and Xbox in North America in the first quarter of 2005. Zucker also commented on recent announcements and their implications: "We will continue to invest heavily during 2005, particularly in the areas of product development and our product pipeline. In the first months of 2005 we have already taken two important steps in this direction through our arrangement to license Unreal Engine 3.0 technology for next generation console development and through our multi-product agreements with Warner Brothers to bring a broad portfolio of Cartoon Network programming to the videogame market." However, he suggested that most of the fruits of these announcements would be seen in the 2006 fiscal year, accompanied by the release of next-generation consoles.