Notes from Midway's Q1 earnings conference call
Midway today held its first quarter earnings conference call, which also marked interim president and CEO Matt Booty's official introduction to investors and others (like us) listening in. Graciously, interim CFO Ryan O'Desky handled the seemingly good news that Q1 2008 revenue hit $29.9 million, up $18.8 million over Q1 2007's revenue, followed by the very bad news that Q1 '08 net losses totaled $34 million ($14.2 million more than Q1 '07 losses), before passing the mic over to Booty.
After a brief introduction, which included a shoutout to Midway's coin-op era "heyday," the 19-year company veteran set out to map a "path to profitability." While Q1 featured "no new releases in North America," and the Q2 highlight has already come and gone (what, you missed it?), Booty focused on the expected Q3 summer release of Unreal Tournament 3 for Xbox 360 as a potential starting point for getting the company back on track. (A port of last year's shooter leading your current portfolio more than halfway into 2008? Really, Midway? Really?)
Fear not. The "new" Midway is about making the right decisions for its long-term franchises, none of which has been more stretched and abused than Mortal Kombat. Have you heard? The next one's got Batman!
Booty added little to spark our general disinterest in the it-came-from-the-90s mashup, but did give us this canned detail: "integrated and compelling storyline" confirmed. But, actually, Mortal Kombat vs. DC Universe might not represent the worst of Midway's troubles. Consider that the remainder of Midway's forthcoming lineup is filled out by This Is Vegas, in which players experience "classic Vegas moments" in "open-world gaming evolved," The Wheelman, featuring "an iconic figure in the game world," and finally, a title that "got a lot of attention" at Midway's recent Gamers Day: TNA iMPACT! (no, our caps lock key is not stuck).
Despite questionable R&D, Booty stressed that getting out of the hole was a matter of coordinating sales, marketing and retail, with special focus on launch strategies. If Midway's abominable Game Party can move over 800,000 units worldwide (really, it has), we're willing to believe it. But it may take converting all of these IPs into Waggleware® to get there.
