Vivendi, VU Games Show Positive, WoW-Aided Results

Paris-headquartered multimedia giant Vivendi Universal, which owns publisher and developer VU Games, has announced its 2005 first half financial results, showing a 31% increase in income to 1,994 million euros ($2.45 billion), and a profit of 1,162 million euros ($1.43 billion), up significantly from 344 million euros ($422 million) in the first half of 2004. In announcing its results, VU has particularly singled out subsidiary Vivendi Universal Games for praise, along side other divisions such as Canal+ and the Universal Music Group, commenting of VU Games: "World of Warcraft, with four million players at end of August 2005, has been a worldwide success and enabled Vivendi Universal Games to return to profitability." Split out as part of its results, it was revealed that VUG's profits were EUR 13 million ($16 million) for the half, as compared to a loss of EUR 168 million ($206 million) in the first half of 2004 (albeit an earlier loss including approximately EUR 90 million ($110 million) of non-recurring items relating to restructuring costs, the cancellation of some products, and write-offs of certain titles.) According to VU: "This significant improvement reflects the combined impact on margins of the increase in net sales and reduced operating expenses as a result of the recovery plan introduced in 2004." However, it's also noted that one product in particular, as operated by the VU-owned Blizzard Entertainment, is likely pushing VU Games back into profit: "Earnings from operations also benefited from the massive commercial success of World of Warcraft (4 million players at the end of August) and a strong increase of subscriptions with higher margins." Going forward, important VU Games titles for the second half of 2005 include The Incredible Hulk: Ultimate Destruction, F.E.A.R., and the label's key holiday season title, 50 Cent: Bulletproof, while 2006 will bring important titles such as Starcraft Ghost and the delayed Scarface: The World Is Yours. Parent company Vivendi itself says that it intends to beat its full-year profit target of 1.8 billion euros ($2.2 billion), and, although impressed by the general re-invention of the company, shares were down slightly to $31.83 in early trading.