SCi To Take $29m Hit On Console Transition Price Protection

Publisher SCi, parent group of Eidos (Tomb Raider Anniversary), has announced ahead of its full year results in September that it will be taking a $29 million hit due to price protection for retailers, as PS2 software prices fell while consumers waited for the release of the Wii and PS3. "During the period surrounding the introduction of the PlayStation 3," said SCi, "retail prices for PlayStation 2 games fell steeply. This pricing pressure has been most acute during the final months of our financial year when many of our most significant launches have taken place." "The Group's results will reflect exceptional price protection of approximately £14 million ($28.8 million), which the Board believes, is a prudent estimate of the cost of providing price protection to retailers. These costs, which are deducted from revenue, principally relate to PlayStation 2 products, but also to other older platforms including Microsoft Xbox, Nintendo GameBoy Advance and Nintendo GameCube." SCi also said that with the transition now complete, "the Board continues to believe in the long-term success of PlayStation 3 particularly after recently announced reductions in the retail price of the hardware in North America," but it added that "it may take longer than originally expected to achieve a commercially successful installed base." It said that with Wii and DS installed bases growing, it has "put into production further products for these platforms which will be launched in 2008 and 2009," though no specific titles were mentioned. Counted amongst fiscal 2007's highlights were the million selling launch of Tomb Raider Anniversary and Just Cause, as well as the strong launch of Battlestations Midway. Pony Friends for the DS was also noted for its ability to cater to a younger and broader audience, with a Wii version currently planned. SCi also noted forthcoming film versions of Hitman and Kane & Lynch as proof of its strong original IP development, said it had seen strong distribution revenues from titles like Ninja Gaiden Sigma, and saw growth in its new media business with the acquisition of Rockpool, Bluefish Media and Morpheme.