Midway: Xbox First Of Current-Gen Systems To Die?

Talking in the conference call following the Midway financial results announced earlier today, Midway execs commented sharply on the swift dropping of support by Microsoft and game publishers for the original Xbox console. Responding to an investor question, Midway executives noted: "Clearly, Microsoft has shifted onto the 360. Xbox software sales, month over month, continue to drop pretty quickly." However, the execs contrasted this with other sales for current-gen consoles, admittedly likely to be in better shape because their next-gen counterparts have not yet launched, commenting: "We are pleasantly surprised about how well GameCube sales have held in, particularly for specific genres that Nintendo have done well with - kids in particular." They also noted: "PlayStation 2 continues to perform very well", commenting: "PlayStation 2 should be around... Sony has a very good history of supporting their platforms long after the new machines come, and Nintendo has a pretty good history there as well." However, with Microsoft's only partial success with backwards compatibility, and many games sitting on shelves with consumers somewhat unclear whether they might play on the Xbox 360 or not, the Midway execs suggested: "Xbox is going to be the platform that, after the holidays, it's certainly going to be pretty difficult to certainly sell any new games for." Of course, games for the original Xbox are not Midway's main thrust here, as they reiterated their main aims earlier in the conference call: "The most important thrust of our product strategy... is our plan to gain market share in the next console cycle by releasing high potential, high quality and ambitious games that leverage industry trends and have broad mass market appeal." Overall, Midway's results for the quarter reported net revenue for the period to be $25.9 million, down from the $36.9 million reported during the same period in 2005, as well as a loss for the period of $31.0 million. This loss was up slightly from second quarter 2005, during which the company reported a loss of $29.9 million.