fy-2011
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Take-Two revenue down, but profit earned in latest quarterly results
The last time we checked in on Take-Two's quarterly earnings the publisher was operating on a different fiscal calendar -- and had regained profitability. Today, the company introduced its recalibrated fiscal year, reporting on the third quarter results of its fiscal 2011 year -- in our world: October–December 2010. Revenue was down for the quarter, recorded at $334.3 million, compared to the $360.4 million for "the year-ago period," though Take-Two remained profitable, reporting a non-GAAP income of $49.5 million. The usual culprits were bringing home the bacon for the period, including Red Dead Redemption, Borderlands, and Grand Theft Auto IV (now in its "Complete Edition" form). Through the first nine months of the current fiscal year (April–Dec. 2010) revenue jumped 80 percent from the previous year, reaching $954.6 million. Take-Two expects to trot past the billion-dollar mark this quarter as the sun sets on its fiscal 2011 (ending March 31) and has increased its projected annual revenue to $1.10 billion.
Sega Sammy posts profitable third quarter, Vanquish moves 820K
Sega Sammy's financial results for the nine months ending December 31, 2010 showed marked upswings in overall sales and profit for the company. While the majority of money came through its pachinko and amusement arm, game publishing saw ¥67.4 billion ($826 million) in revenue and ¥2.8 billion ($34.3 million) in profit -- both notable increases since the company's last check-in. Hidden among the many, many financial numbers was news that Platinum Games' fourth effort, Vanquish, had sold 820,000 copies since its release in late October, while Sonic Colors had moved a whopping 1,850,000 by the end of 2010. That's alotta hedgehog! The majority of the company's overall sales took place in Europe (owing to sales of Football Manager 2011), with the US following closely behind and Japan in a distant third.
Square Enix profits plummet, but loss avoided to close out 2010
The potentially lucrative holiday quarter -- Q3 of Square Enix's fiscal year -- didn't bring a slowdown to the publisher's sinking profits. Instead, the company slid closer to landing in the red as 2010 came to an end. For the nine months ending December 31, 2010, Square Enix today reported a net income of ¥1.821 billion ($22.33 million), a 76.6 percent decrease in profits from the same period the year before. When the iPhone port of Secret of Mana is perhaps your most significant release during the holidays, what more can you expect? Accordingly, net sales in the nine-month period were also down year-over-year (though just by 27.5 percent) for the business, which (aside from games) includes amusement, publication and merchandising products. Speaking of games, the holiday quarter didn't push any additional Square Enix titles into coveted "million-seller" status -- only Kane & Lynch 2 and Dragon Quest Monsters: Joker 2 (Japan only) have reached a million in sales during the company's current fiscal year (ending March 31, 2011), and both had done so by the end of last September. "Responding to intensifying competition in the console game market, the company has implemented organizational changes in the third quarter while also working to better select and further strengthen our most competitive titles," Square Enix president Yoichi Wada offered in a short statement accompanying the financial report. "In other platform areas including PCs and smartphones, we have created successful examples of new content such as Nicotto Town and Sengoku Ixa," Wada added. "By pursuing these two independent markets, we are raising our ability to succeed in diverse business models." So diversified has Square Enix become, in fact, that this is the first we've ever heard of these two "successful" projects! [Pictured: Nicotto Town; image source: nifty.co.jp]
Company of Heroes Online, WWE Online canceled
This morning, we reported that THQ would "evaluate the next steps for the Company of Heroes series" after the March 31 conclusion of the Company of Heroes Online beta. We now know that whatever those next steps are, they won't include Company of Heroes Online. The latest THQ earnings report notes that the company has "reevaluated its strategy of adapting certain Western content for free-to-play online games in Asian markets." And, as a result of that reevaluation, it has canceled Company of Heroes Online and WWE Online. COH Online was originally announced as a South Korean release in partnership with Windysoft, and WWE Online was only intended for release in Asia. In an investor phone call, THQ CEO Brian Farrell explained the decision, claiming that THQ's focus is on "developing great content, most of it IP owned by THQ. And the concept of converting some of these concepts for a market -- though Korea's still a great market -- it just wasn't the top of our list for focus." He noted that THQ's "small" Korean office has also been closed.
THQ highlights 1.2m uDraw units in Q3 earnings; wants more uDraw, fewer kids movie-based games
While a large slate of AAA titles is expected from THQ's Core Games unit in its Q4 2011 and 2012 fiscal periods, its fiscal Q3 2011 (October–December 2010) financial results are all about the less high-profile Kids, Family and Casual Business which had an unexpected hit with the North American release of uDraw Game Tablet for Wii last November. In less than two months, THQ managed to move over 1.2 million units in North America alone; an international release is expected "in the March quarter" (by the end of March this year). And it's a good thing, too! THQ also "reevaluated the sales potential of games based on its kids movie-based licenses" for its Q3 statement and, "consistent with recent industry trends," it "lowered expectations for this category." That cost the company an impairment of $30.3 million which was excluded from its Q3 non-GAAP results (which we're getting to, hold on!). Instead of licensed kid's games, the Kids, Family and Casual Business is "increasing its focus on popular new play patterns and devices such as Kinect for Xbox 360, PlayStation Move, the uDraw GameTablet and Nintendo 3DS." Makes sense, right? Now for the numbers: For the three-month quarter ending December 31, 2010, THQ posted net sales of $314.6 million, an eight percent drop year-over-year, resulting in a net loss of $14.9 million compared to a net income of $542,000 in the same period the previous year. In addition to the aforementioned $30.3 million impairment, THQ also excluded "a charge of $9.9 million related to the cancellation of Company of Heroes Online and WWE Online" from its non-GAAP results. So, with those things in mind, THQ reported non-GAAP net income of $28.5 million for the quarter compared with net income of $26.6 million for the prior-year period. We're on the THQ earnings call now, and will report back any updates.
EA incurs $322 million loss in Q3, 22% of employees in 'low cost locations'
EA suffered a net loss of $322 million for its fiscal third quarter ending December 31, 2010, a fourfold increase from the same period last year. The company generated revenues of a mere $1.05 billion during Q3, a decrease of nearly $200 million from the holidays last year. Despite significant increases in digital revenue and "record breaking" iOS sales, there wasn't enough to offset the reduction in packaged goods (disc-based games) sales, titles with "significant" development costs and the general cost of goods sold for EA's business. The company also noted that it ended the quarter with 7,742 employees, down from 8,537 a year ago and the 7,820 workers it employed during Q2 before committing its "seasonal roll-offs." EA CFO Eric Brown mentioned that 22 percent of the publisher's employees are now in "low cost locations." We've followed up with EA for its definition of "low cost locations."
EA earnings from digital distribution up in fiscal Q3, retail not so much
EA sent out its earnings for fiscal Q3 2011, which ended December 31 of last year, and it was a good quarter for EA ... 's digital distribution initiatives. Net digital revenue is up $62 million year over year, hitting $195 million, while net "packaged goods" publishing revenue dropped $78 million to $91 million in the quarter. Along with a drop in revenue from games distributed by EA, the publisher's year-over-year take dropped $190 million. Touting its digital domination, EA claimed to be the "#1 publisher in the Apple App Store for both iPhone and iPad and #1 on Microsoft Windows Phone 7" in the West during the quarter. It also touted large shipments of two of its Q3 retail releases, Medal of Honor and Need for Speed: Hot Pursuit, both of which have passed five million units shipped to date.
Kinect sales help drive strong holiday quarter for Microsoft, Xbox division revenue soars
For the second-straight quarter, the spotlight was on the Entertainment & Devices Division, under which the Xbox business drove slightly record-setting revenue for Microsoft in the holiday quarter (in the books as Q2 of fiscal year 2011). Profits for the quarter ending December 31, 2010, were actually slightly down compared to the same period in 2009, but spirits must be up -- we're talking about $6.63 billion in profit pocketed by Microsoft last quarter. Entertainment & Devices itself increased its revenue a staggering 55 percent in comparative year-over-year fiscal Q2 growth, pulling in $3.6 billion of the mega corporation's $19.95 billion total revenue for the quarter. "We are enthusiastic about the consumer response to our holiday lineup of products, including the launch of Kinect," said Microsoft CFO Peter Klein. "The 8 million units of Kinect sensors sold in just 60 days far exceeded our expectations." The company added that Kinect's popularity had a trickle-down effect, boosting sales of Xbox 360 consoles and games, as well as Xbox Live subscriptions. Any impact on revenue from the launch of Windows Phone 7, however, went unmentioned.
Stark SouthPeak Q1 financials due to My Baby issues
SouthPeak's first quarter results saw the shaky publisher report a net loss of $1.2 million, compared to the $687K profit it reported during the same time last year. Revenues during the period were $1.4 million, a steep drop from the $16.7 million reported in the previous fiscal year. The publisher claims sales during the quarter were "largely impacted" by the My Baby mama-drama currently going on in the courts. SouthPeak is hopeful that a summary judgment granting the company the rights to resume production of My Baby: First Steps and "reinstate the contract with Nobilis" for future My Baby sequels will be upheld on December 2. Beyond praying that it gets My Baby back and sequels popping out, SouthPeak also spent time, and the bulk of its marketing costs during the quarter, promoting Two Worlds 2 -- which will arrive in the UK and US in January -- and getting the hype machine rolling for Stronghold 3.
Namco Bandai cuts first half losses in FY11, Despicable Me its biggest seller
Namco Bandai recently posted its financial results for the first half of FY2011, a period running April - September. The results don't look too hot on paper -- the company's "Content" division (which encapsulates its console games branch) reported total sales of ¥7,145 billion ($879 million), while the company as a whole ended up with a net loss of ¥1.93 billion ($24 million). However, when compared to the ¥6.04 billion ($74 million) in net losses the company suffered during the first half of FY10, these figures are ... well, significantly less terrible. The company's biggest seller released in the current fiscal year was the licensed adaptation of the animated film Despicable Me, which moved 390,000 copies during the first half. Trailing close behind was Dead to Rights: Retribution at 350,000 copies sold. Imagine what kind of a sales powerhouse Namco would have on its hands if Universal ever did an animated movie about a young boy and his insatiable, murderous dog.
Mad Catz reports record Q2 sales, led by Tritton peripherals
Mad Catz is a bunch of Happy Catz today, announcing record net sales of $37.4 million in its fiscal Q2, which ended in September. That's 73.2 percent higher than Q2 of last year. Operating profit was $1.9 million -- another record, and obviously preferable to last year's negative $200,000. Xbox 360 sales accounted for the largest percentage of sales, 37 percent in all. PS3 sales grew one percent, and everything else shrunk in proportion. The biggest-selling category of items wasn't FightSticks, as might be expected, or even Modern Warfare 2-branded controllers -- it was audio products, including those made by new acquisition Tritton. Specialty controllers were the next best sellers. "While second quarter net sales benefited from initial shipments of Rock Band products and our recently acquired Tritton gaming audio line," said Mad Catz president Darren Richardson, "it's important to note that, thanks to our strong portfolio of new products across all our brands, we would still report growth for the quarter if both those product lines were excluded from our sales."
Square Enix profits down, but not out as familiar franchises keep sales alive
If you think we're going to explain that mess of scribbles above -- fuggedaboutit! What we have parsed from Square Enix's six-month financial report (April–September 2010) is a rather slight net income: ¥1.723 billion ($21.4 million). While any company would take pocket change over a loss, Square Enix profits are indeed down 36 percent from the same period last year, and software sales for the first half of this fiscal year have relied heavily on "contribution from highly profitable carryover sales of major titles released in March" -- in other words: Final Fantasy XIII picked up the slack. And who were the slackers? Square Enix highlighted five "major titles" released during the period: Dragon Quest Monsters: Joker 2 (DS) - 1.28 million units sold (Japan-only) Final Fantasy XIV (PC) - 630K units sold (worldwide) Just Cause 2 (multiplatform) - 560K units sold (worldwide)* Kane & Lynch 2: Dog Days (multiplatform) - 1.12 million units sold (worldwide) Kingdom Hearts: Birth By Sleep (PSP) - 510K units sold (worldwide)* *Title released in some regions prior to April 2010; sales only reflect those recorded in the six months ending September 30, 2010. Finally, Square Enix heralded its recent partnership with Chinese online games publisher Shanda Games; a deal indicative of two of the company's three proclaimed growth strategies: globalization and becoming "network centric." As for the third? Square Enix's three-pronged attack also stresses "strengthening our own-IPs." So when's that next Final Fantasy coming out again? [Image: Year-over-year comparison of monthly revenues from existing outlets; source: Square Enix]
THQ reports $47m Q2 loss, remains fixated on future
THQ didn't have much to say about its second quarter earnings for the period ending September 30, racking up a net loss of $47 million on net sales of $77.1 million. Compare that to a net loss of $5.6 million on net sales of $101.3 million in the prior-year period, and you can see why it wasn't very talkative. Instead, the company took the opportunity to once again point towards its future, including the December quarter launches of WWE SmackDown vs. Raw 2011 and the family friendly uDraw GameTablet for Wii ... and then it looked even further in the future, laying out its March quarter releases, including Homefront, WWE All Stars, UFC Personal Trainer and de Blob 2. But it didn't stop there! Other forward-looking highlights included the eight-year extension of the lucrative UFC business, the hiring of Assassin's Creed designer Patrice Désilets, and the high-profile fiscal 2012 lineup, including Red Faction: Armageddon, Warhammer 40,000: Space Marine, and the next Saints Row title. Hey, these turnarounds don't happen overnight, right? THQ continues down its path of high-quality (and expensive to produce!) AAA releases, but we bet it wishes there was a quicker way to get there. We'll be on the conference call hoping to learn more about what's next at THQ and tally the number of times we hear the term "transmedia."
EA cuts quarterly losses, despite declining revenue
Electronic Arts has posted its financial report for the second quarter (July–September) of its 2011 fiscal year, posting $631 million in revenue, a decline of $156 million compared to revenue recorded during the same period last year. However, the megapublisher managed to cut its net loss to $201 million -- almost half of last fiscal year's second quarter loss of $391 million. EA CEO John Riccitiello said of the company's recent performance, "We credit our results to blockbusters like FIFA 11 and to innovative digital offerings like The Sims 3 Ambitions and Madden NFL 11 on the iPad." Indeed, FIFA 11 was a golden goose for the publisher -- it was the best-selling game in Europe during the quarter, pushing the life-to-date sales of the FIFA franchise past 100 million worldwide. The publisher also revealed its "cost reduction plan," which seeks to "restructure key licensing and developer agreements to improve the long-term profitability of its packaged goods portfolio." How much more obtuse can the plan get, huh?
NBA Elite 11 canceled, series handed off to EA Tiburon
EA Sports has decided to give NBA Elite 11 the longest delay possible, updating the game's release date to never. EA's John Schappert confirmed during a recent investor's call that "we have elected to cancel NBA Elite 11." Elite had attempted to completely rework EA's basketball pedigree, abandoning the gameplay and namesake of EA's long-running NBA Live franchise. The gamble appears to have backfired, and development of the next EA Sports basketball title is being moved from EA Canada to the studio famous for Madden. "Future development of that franchise will be handled at EA Tiburon in Orlando," Schappert confirmed.
Sega software sales on the rise, for now
Sega Sammy's recovery continues: Despite the generally bad economy, the company is turning around -- just not at Sonic speed. For the first half of the company's fiscal year, ending September 30, 2010, sales in the Home Video Game Software division (the "Sega" you know) were up 19 percent over the same period last year to ¥18.7 billlion ($231 million). Now, imagine this group as a Russian nesting doll inside the "Consumer Business" division, which recorded net sales of ¥38.7 billion ($477.5 million; up 2.9 percent) during the first half, despite an operating loss of ¥1.3 billion ($16.1 million) -- though the full-year projection is a more rosy ¥7 billion in operating income. Three PSP games were highlighted as "Major Titles" for the period, including Kurohyo: Ryu ga Gotoku Shinsyo, a.k.a. Black Panther: New Yakuza Chapter, which sold 250,000 units; and a pair of licensed music games, Hatsune Miku: Project Diva 2nd and K-On Houkago Live, accounting for 340,000 and 210,000 units sold, respectively. Overall, total sales of 33 available software SKUs in the first half reached 6.6 million units, besting the 5.4 million mark set by 30 SKUs during the first half of the last fiscal year. However, the full-year projection -- 16 million units sold from 75 SKUs -- is significantly lower than last fiscal year's total, 26.75 million units sold (across 105 SKUs). In its report, the company said that the software industry has been "generally weak" in the US and European markets due to ... "headwind like sluggish personal consumption." The company's overview statement claims: "The Group needs to adapt to changing business environment in which the market demand for new content geared to social networking service (SNS), smartphone is expanding."
Microsoft announces record Q1 revenue, thanks 'Xbox 360 consoles and games'
Microsoft has issued its earnings report for Q1 of its fiscal year 2011, and things are looking good for its gaming division. The company reported revenue of $16.20 billion for the period, which ended on September 30. This amounts to a 25 percent increase over Q1 FY 20111 overall. When it comes to Xbox 360, the console was cited as a top performer, alongside Windows 7 and Office 2010. In fact, Microsoft reports that sales are up 38 percent overall, compared with the same quarter last year, "outselling every competing console in the U.S. for each of the past four months," it gloats. Diving into the numbers, Microsoft's Entertainment and Devices Division (home to Xbox, Zune, and Windows Phone 7) benefited from a 33 percent rise in revenue from Xbox 360 sales over Q1 FY 2010, to the tune of $409 million. Shipments of the console to retailers totaled 2.8 million units for the quarter, up from 2.1 million during the same period last year. Revenue from software sales also increased, bolstered by (what else?) Halo: Reach. The Bungie title generated a whopping $350 million for Microsoft in the quarter -- a number made more impressive by the fact that, having launched September 14, that revenue resulted from only 17 days of the game's sales. No wonder Microsoft is considering releasing Halo games on a more frequent basis.
Nintendo painted red in first-half fiscal year results
We'll be the first to admit it's nigh impossible to grasp the nuances of just what in the world is going on with the global economy, but things are clearly up you-know-whose creek without a paddle when Nintendo reports a ... loss?! Sure, earnings were seriously down for Nintendo during the same six-month period last year (April–September), but even then, as other companies suffered tremendous hits, Nintendo enjoyed ¥69.5 billion in profit (which was roughly $766 million by the rate of exchange a year ago). The problem is that the yen has appreciated wildly against the dollar since that time -- what was $766 million a year ago, would be more like $850 million today. In and of itself, that kind of appreciation might look spectacular, except 81.4 percent of Nintendo's sales have been overseas during the current fiscal year. When the yen is this strong, earnings on Japanese exports (sold with importers' currencies) are dashed on their way back to Japan (where they are converted back to yen). According to Nintendo's first-half report (April–Sept. 2010), "foreign currencies generated exchange losses totaling 62.1 billion yen," and, in turn, the company suffered net losses of ¥2 billion (about $24.6 million) for the period. Keep in mind, this loss comes after selling 4.07 million copies of Pokémon Black and White since September 18 (in Japan alone); 5.1 million units of Super Mario Galaxy 2; and a million-plus Wii Party games. Worldwide, DS software sales totaled 54.84 million units, while Wii games accounted for 65.21 million units sold in the first-half of the fiscal year. As for hardware, the various DS models combined to move 6.69 million units (including 2.26 million DSi and 3.21 million DSi XLs), as Wii racked up another 4.97 million units sold during the period. And did you hear? The new red Wii and DSi XL are going to be released next month to celebrate ... uh, the 25th anniversary of Super Mario Bros., of course!
Capcom reduces fiscal forecast due to Lost Planet 2 shortfall
Capcom has adjusted its earnings outlook for the current fiscal year, ending March 31, 2011. Despite some promising sales numbers in Japan from Sengoku Basara: Samurai Heroes and the Japan-only Monster Hunter spinoff Monhan Nikki Pokapoka Airu Mura, the publisher is expecting 91 billion yen in net sales this year ($1.09 billion) instead of the previous estimate of 95 billion ($1.14 billion). Contributing factors to the falling forecast include the rising yen vs. the dollar and euro, the one-month delay of Dead Rising 2, and continued fallout from underperformance of Lost Planet 2. On a happier note, this reduced forecast is still much better than the 66.84 billion yen Capcom pulled in last year.
Sega planning six titles for 3DS in FY11, including Monkey Ball
Sega outlined part of its plans for Nintendo's new handheld during last night's press conference. During the next fiscal year (which runs until March 31, 2012), Sega plans to release six titles for the 3DS, only two of which have been detailed: Super Monkey Ball and ... something Sonic-flavored. While the identity of the latter is still relatively up in the air, the spherical simian platformer has already gotten a bit of screen time. Sega Europe revealed a few key features of Super Monkey Ball 3D (working title), such as offering the player a choice between using the 3DS' touch pad or tilt controls to maneuver their monkey. The game will also have four-player wireless modes, such as Monkey Race and Monkey Fight, which we thought had been outlawed in most civilized territories of the world. Check out some screenshots from Super Monkey Ball 3D below. %Gallery-103616%
