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Samsung warns of lower profits amid falling demand for memory chips
Samsung has warned of plummeting profits and plans to cut back on memory chip production in response to falling demand.
Nintendo denies it will squeeze more profit from its new OLED Switch
Nintendo has taken the unusual step of denying a report that it's making more profits from its new OLED Switch model.
HTC will lay off 1,500 employees in search of profit
HTC has announced that it will lay off another 1,500 employees from its Taiwanese manufacturing division in a bid to restore its profitability. In a statement, the company says that it will reorganize itself (again) to better take advantage of efficiency savings as well as help cushion its non-existent bottom line. Officials have, however, pledged to work with the Bureau of Labor and help all of those affected.
Amazon finally starts paying proper taxes in European countries
For many years, Amazon has sent a huge percentage of its European revenues over to Luxembourg. The tiny country levies a much smaller rate of tax than most of the countries in which the retailer operates, allowing it to keep a larger share of sales. With the European Commission breathing down its neck over claims it had agreed an illegal tax deal with Luxembourg, Amazon has quietly begun booking sales in some of its biggest European markets. According to the Wall Street Journal, the company began paying direct taxes on sales in the UK, Germany, Italy and Spain from May 1st.
Monument Valley made $5.8 million, over 80 percent on iOS
Monument Valley developer Ustwo earned $5,858,625 from sales for the game as of this past Monday, as highlighted in a fancy infographic breaking down the puzzle game's earnings. Of that revenue, 81.7 percent was earned on iOS, compared to 13.9 percent on Android (where it was released about a month later) and 4.3 percent on Amazon. Ustwo says Monument Valley was installed on over 10 million unique devices, though its profits come from 2,440,076 official sales. The original game took $852,000 to develop while its eight-level Forgotten Shores update cost the developer $549,000. It first arrived on iOS in April 2014 and recouped its development costed in its first week; Ustwo has now clarified that its launch day on the App Store amounted to $145,530 in revenue. [Image: Ustwo]
Investors plug $6 million into Majesco
Majesco Entertainment completed an investment round that resulted in $6 million in funding, the Cooking Mama publisher announced today. $1 million of the funds were issued to the company with the rest stashed in escrow until certain, as-yet-unknown conditions are met by Majesco. The company also appointed two people to its boards of directors to replace two that stepped down, one of whom is Jesse Sutton, who will remain Majesco's CEO after resigning from the company's board. SEC filings in November admitted that Majesco "suffered losses that raise substantial doubt about our ability to continue as a going concern." It reported a 27.2 percent drop year-over-year in net revenue in September, as well as net losses of $2.7 million. As a result, Majesco laid off several staff in October to reduce fixed costs. The company also noted last month that it is "currently not developing any significant new games for release in fiscal 2015," which ends on October 31, 2015. [Image: Majesco]
Square Enix reports year-over-year increase in sales, income
Square Enix reported 35.4 billion yen ($308.6 million) in net sales for the second quarter, ending September 30. While that represents a 6.3 percent drop from the company's first quarter results, its six-month net sales of 73.1 billion yen ($637.9 million) is an 18.6 percent boost year-over-year. As for Square Enix's digital entertainment and gaming division, it saw 43.8 billion yen in net sales ($382 million) for the six month period, a 43.1 percent increase year-over-year. The publisher's net income also dropped 32.7 percent for the quarter to 2.3 billion yen ($20 million). Its half-year measures for net income reached 5.7 billion yen ($49.7 million), a 118.8 percent increase over the same six-month period last year. Square Enix is projecting between 150 billion and 160 billion yen ($1.3 billion - $1.4 billion) in net sales for the full year, ending in March 2015, and between 7 billion and 10.5 billion yen ($61 million - $91.6 million) in net income. [Image: Square Enix]
Activision Blizzard earnings bolstered by Destiny and World of Warcraft
Another financial quarter is fading into memory, and that means it's time for another earnings call for Activision. The financials tell a fairly bright story for this particular quarter, with the continued sales of Destiny, overall success of Hearthstone, and the subscriber bump for World of Warcraft pushing the company up in revenue compared to the same quarter last year. Destiny, Activision says, has now racked up 9.5 million registered users. As a result of these figures, the company has increased its overall earnings forecast by two percent, with the upcoming phone releases for Hearthstone, a new Call of Duty title, and the Warlords of Draenor release accounting for the increased profits. You can read the whole thing yourself if you want to take a closer look at the company's financial workings.
Activision rakes in $753 million in revenue for Q3 [Update]
Activision reported $753 million in net revenue for the third quarter (ending September 30), a nine percent increase over the publisher's $691 million in revenue recorded for the same period last year. A record 67 percent of the company's revenue came from digital channels, according to Activision's Q3 2014 financial report. The company also reported a $23 million net loss, a sizable drop from its $56 million in income reported in the same quarter last year. Looking ahead, Activision raised its full-year projections by 2 percent thanks to the positive Q3 results. It now expects to earn $4.325 billion in net revenue in 2014, $1.492 billion of which is expected in the next quarter. Besides the continued sales of its hit MMO-meets-shooter, Destiny, Activision will report sales in Q4 for another FPS that just arrived this week, Call of Duty: Advanced Warfare. The publisher's popular mobile CCG Hearthstone will land on iPhone and Android phones early next year and Android tablets by the end of this year, having already reached 20 million downloads in September. Update: Activision also noted that Destiny reached 9.5 million registered players in its report. The publisher clarified to Engadget that "registered users" "refers to unique PlayStation Network / Xbox Live accounts, while multiple characters per account are not factored in." [Image: Activision]
PS4 sales up to 13.5 million consoles
Sony reported 309.5 billion yen in sales ($2.77 billion) for its Game and Network Services division for the second quarter, ending September 30. It represents an 83.2 percent improvement year-over-year thanks to the continued success of the company's latest home console, PlayStation 4. Shipments for the PS4 have now reached 13.5 million, as the company moved 3.3 million units during the quarter. The Games and Network Services division also posted an operating income of 21.8 billion yen ($195 million), a massive increase compared to the 4.8 billion yen ($43 million) reported in the last quarter and the 4.2 billion yen loss ($37.6 million) year-over-year. While the gaming division thrives, Sony itself is in the red, reporting an 85.6 billion yen operating loss ($766 million). The company increased its loss forecast in September due to its struggling smartphone sales. [Image: Sony]
Take-Two makes it rain $1 billion more in fiscal 2014
Take-Two reported net revenue of $2.35 billion for fiscal 2014 (the year ending March 31, 2014), a 94 percent growth from its reported revenue of $1.21 billion in 2013. It also reported a net income of $361.7 million, which compares rather favorably to the net loss of $31.2 million it suffered last year. As of the end of fiscal 2014, Take-Two had "cash and cash equivalents of $935.4 million," plenty to make it rain a few times. As for the fourth quarter of fiscal 2014, Take-Two's net revenue was $195.2 million, a 34.8 percent decrease compared to the same quarter last year ($299.5 million). It also reported a net loss of $30.8 million for the quarter, which compares to the net gain of $21.2 million reported in Q4 2013. The publisher's digitally-delivered revenue increased 65 percent year-over-year to $435.1 million on a non-GAAP basis (Generally Accepted Accounting Principles). In its earnings call, Take-Two CEO Strauss Zelnick noted that Grand Theft Auto Online was the "single largest contributor" to the company's digital revenue growth. Take-Two also reported that it has shipped 33 million copies of GTA 5 to date. Looking ahead to the next fiscal year (ending March 31, 2015), Take-Two projects its non-GAAP net revenue to fall between $1.35 billion and $1.45 billion, and anticipates its net revenue between $120 million and $135 million for the next quarter, also on a non-GAAP basis.
LG one of the few making money from TVs as profits triple
While LG's earnings and profits are dwarfed by Samsung, at least it has some bragging rights this quarter. Unlike its Korean arch-enemy, LG actually made money with its home entertainment and display division, which it chalked up to better sales in large TVs. In fact, the company claims it now sells more big-screen displays than any other, including Samsung, with a 27 percent share of the market worldwide. That helped contribute to 14 trillion won ($13 billion) in total sales, with an operating profit of 504 billion won ($471 million) -- triple what it managed the same time last year. (For a sense of scale, Samsung pulled in around $52 billion dollars and made $8 billion or so in profit.)
Perfect World enjoys a profitable 2013
Perfect World Entertainment is celebrating this week as the most recent financial reports show a revenue increase of 11% for last year, thanks to forward-thinking initiatives aimed at investments in other companies and a focus on mobile gaming for the future. Most impressive was the Q4 results showing a net profit growth from RMB86.4 million to RMB209.8 million ($34 million), according to a report at Gamesindustry.biz. All of this, of course, is on the heels of DotA 2's upcoming release in China and Neverwinter's Chinese release later this year which both may play a part in even further growth for 2014.
Sega slashes profit forecasts by 36 percent
Sega announced an adjustment to its earnings forecast for the fiscal year ending March 31, cutting its expected net income by 36.2 percent. The company adjusted its projected net income to be 30 billion yen ($293.5 million), down from its previously-reported amount, 47 billion yen ($459.8 million). Additionally, it expects its net sales to be 377 billion yen ($3.69 billion), a 22.3 percent decrease from its original projection of 485 billion yen ($4.75 billion). Sega cited a decline in its pachislot and pachinko machine business for the change in projections. The company cut its pachislot machine sales projection by 171,000 units and its pachinko machine sales projection by 304,700 units for the fiscal year. The biggest cut comes to Sega's projected operating income: a 49.3 percent slide from 73 billion yen ($714.2 million) to 37 billion yen ($362 million). Should Sega meet its new projections, it would amount to a year-on-year increase in net sales and operating income by 17.3 percent and 94 percent, respectively, but would also represent a 10.3 percent decrease in net income. [Image: Sega]
Final Fantasy XIV provides Square Enix profitable 2013
Final Fantasy XIV's reboot last year was more than anecdotal good for Square Enix's image, it was pretty positive for the bottom line. 2013's fiscal year ended with the company pulling in profits between 3.5 to 6.0 billion yen ($34 to 59 million), compared to losses equaling 13.7 billion yen ($135.4 million) in 2012. Although A Realm Reborn wasn't the only factor in this turnaround (reduced operating costs as well as increased revenue from other segments of the company also played a part), it was a major contributor. The segment of the company housing video games operation reported a revenue of 56.6 billion yen ($559.4 million) in the final nine months of the year compared to previous operating losses of 392 million yen ($3.9 million).
Free-to-play model more than doubled the revenue of Star Wars: The Old Republic
Following the free-to-play announcement, many gamers were quick to mark Star Wars: The Old Republic as a broken shell of a game, with its business model conversion serving as the last gasp of a game in danger of imminent shutdown. The facts do not support that particular viewpoint. According to the most recent Electronic Arts earning call, the game has more than doubled its revenue since the conversion in November of last year. EA president Frank Gibeau stated in the most recent earnings call that the game's subscriber numbers have remained stable, with more than 1.7 million new players joining the game via the free option. He also restated that the game is aiming to keep up a content delivery schedule around every six weeks. So if you were getting a bit nervous about the long-term viability of SWTOR, it looks like you can rest a bit more easily.
Wargaming.net offers special packages for National Veteran Appreciation Month
It's nearly May, and that means that World of Tanks developer Wargaming.net is keeping up a tradition that's run since the game first became playable. May is National Veteran Appreciation Month, and every year the studio offers package deals to players offering a variety of in-game benefits at a discounted price while donating some of the proceeds to veteran support groups. This year features two bundles. The first offers 2,000 gold and 2 million credits for $23.39; the second offers 10,000 gold, 1.2 million credits, 90 days of premium account status, and a special T-34 tank and garage slot for $115.99. 10% of each sale will be donated to Homes For Our Troops, AMVETS, and the Military Families Fund. So if you want to trundle along in a semi-historical military playground while supporting the brave individuals that made that possible, you can pick yourself up some nice toys in the process. [Source: Wargaming.net press release]
Apple suppliers had a very tough February
February is usually not a great month for the companies that supply Apple with its iOS and Mac device parts (Chinese New Year usually falls right in that month, and production in China always take a big downturn as people celebrate there). But this particular past February was especially bad, according to reports: Topeka Capital Markets analyst Brian White says that the suppliers for Apple that he tracks saw their sales data fall 31 percent over the past month, as compared to the usual 8 percent drop in past years. That makes for the worst February on record for Apple's suppliers, which may or may not soon have an impact on Apple. Now, with Apple's suppliers showing low sales data, that could mean more opportunity for Apple to step in with its big pile of cash and make sure that it has more components than ever to build new devices with, so it's not entirely clear that this will be a bad thing for the company from Cupertino. But of course Apple depends on these suppliers, and if they suffer increased economic pressure for any reason, Apple could experience consequences for its own business.
Samsung estimates $8.3 billion in profits for Q4, brags about phone sales
What's the lion's share look like in sales numbers? About 500 handsets a minute, according to Samsung. The Korean hardware giant flaunted the sales estimate in its Q4 investors guidance, where it says it expects to see $8.3 billion in profits when the official earnings report drops later this month. That's just shy of double what it reported over the same period in 2011. Sammy contributes the growth to a plentiful supply of regional variants of handsets like the Galaxy S III and Note II, as well as high demand for its display technology. The streak may not keep forever though, according to Reuters, analysts are predicting a first quarter slump without a new Galaxy S phone for the spring. We'll have to wait for the full earnings release to see how things pan out, but it doesn't look like the firm will be hurting for cash any time soon.
Anonymous source sounds off on City of Heroes profitability, NCsoft responds
The chance to prevent City of Heroes from being shut down may have passed, but the debates about the game's profitability and the merit of that shutdown aren't going anywhere. An anonymous source has come forward reaffirming several previous data points but also elaborating on some of the details surrounding the closure, including Paragon Studios' plan to pull away from NCsoft entirely and why NCsoft wouldn't greenlight a sequel to the game. Surprisingly, NCsoft's Chief of Corporate Communications, Lincoln Davis, responded to the information, denying all claims but still shedding some light on the issue. Davis mentions repeatedly that Paragon Studios was not profitable, but at no point does he state that City of Heroes itself was not profitable. He also avoids saying that the company was unable to find a buyer for the game but simply that the company was unable to find a buyer that NCsoft thought would support the game "in a manner [players] were accustomed to for years to come." While it won't bring the game back, it certainly sheds some interesting light on the whole situation, albeit light that will likely be of cold comfort to the game's fans. [Update: We've reached out to NCsoft for a more detailed statement; we'll keep you posted when we hear more.]
