Midway Shows Loss For Quarter, Larger Predicted Loss For Year

Officials from Midway Games have announced details of the company’s first quarter financial results, revealing a widening loss for the publisher compared to 2004. The loss applicable to common stockholders grew to $16 million, compared with $15 million a year earlier, despite a perceived creative resurgence for the company. Net revenue for the company fell 31 percent to $13.8 million, from $20.1 million in 2004, partly because only two games (NARC and the GameCube SKU of Mortal Kombat: Deception) were released in the traditionally slow post-Christmas quarter. However, these results were in line with guidance the company issued in February. Despite the paucity of releases and NARC's rough critical reception, the company did enter into a major publishing agreement with Warner Bros. Interactive Entertainment, for various animated film and Cartoon Network properties, during the quarter, likely hoping to gain licensed product mainstays in a similar way to THQ's successes with Pixar and Nickelodeon. The company plans increased spending on the development of new products over the coming months, and forecasts second quarter revenue of $40 million (releasing Unreal Championship 2 and Area 51 in both North America and Europe during the quarter), and a loss of approximately $25 million. For the full year Midway, which expects major releases for the second half of the year to include: LA Rush, Mortal Kombat Shaolin Monks, The Suffering: Ties That Bind, Gauntlet: Seven Sorrows, Ed,Edd 'n Eddy: The Mis-Edventures and Blitz: The League, anticipates greater losses than previously suggested, with revenue of around $225 million and a loss of $47 million – up from previous estimates of $38 million. The company also utilized its conference call to mention a delay into 2006 for the John Singleton-created, Snoop Dogg-starring action game Fear & Respect.