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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."
Monster Hunter again captures 'center stage' in Capcom 9-month fiscal report
At this time last year, Capcom was thanking Monster Hunter Tri for helping the company boost its 2009 year-end financial results. Today, Capcom heralded the monstrous shipments of Monster Hunter Freedom 3 that closed out 2010 and propelled the publisher's profits up nearly 300 percent in a nine-month period. During the first three quarters of its current fiscal year (which ends March 31, 2011), Capcom netted ¥6.836 billion (nearly $84 million) in profit -- up from just ¥1.731 the same period the year before. Sales of "Consumer Online Games" (what we call "video games," excluding mobile content) were the driving force, totaling ¥54.057 billion ($663.6 million) -- a bit more than 76 percent of total sales for the business, which includes arcade and amusement ("slot machine") operations. Joining Monster Hunter Freedom 3 (currently only available in Japan), Capcom noted three additional "million-sellers" in the nine-month period (April–December 2010): Dead Rising 2 (with more than 2 million units shipped); Super Street Fighter IV (1.6 million units shipped "mainly to Europe and the United States"); and Lost Planet 2 (1.5 million sold -- "though the figure was less than [the] projected shipment"). During the period, Capcom also worked on "rebuilding the development departments comprising our core competence" in an effort to shift greater resources to its mobile operations, with specific focus on social gaming. Sales of "Mobile Contents" for the three quarters amounted to a modest ¥2.383 billion ($29.25 million), led by a bevy of iPhone releases and some "positive surprises," including the popularity of The Smurfs' Village on Facebook. And Capcom hasn't even accounted for all the MaXplosion press in January yet!
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.
Nintendo Q3 profits dip 46 percent, Wii and DS sales forecasts cut
Well, that's awkwardly timed. Just as Sony was wowing the world with its new, super-powered PSP dubbed NGP and its wow-that's-smart plan to bring "PlayStation content" to Android phones, Nintendo was reporting a 46 percent dip in its October to December Q3 profits, thanks to flagging Wii and DS sales. Acknowledging the tough market, the Big N cut its sales forecast for the Wii 1.5 million units, down to 16 million, and for the DS 1 million units, down to 22.5 million. But it's not all sad faces here. Nintendo's leaving its annual operating profit forecast alone at its already revised ¥210 billion, altered after it was clear the 3DS would miss the lucrative holiday shopping season. But the late February release of the 3DS in Japan gives the console maker one month of 3DS sales for its Q4 period. So, the question becomes: how many units can they move in Japan in a month? Our official estimate is a lot.
Nintendo Q3 profits down 46 percent, slashes console sales projections
Call it an unfortunate coincidence but Nintendo just announced its quarterly numbers only minutes after Sony announced its new quad-core Cortex-A9 pumping PSP (codenamed NGP) and new PlayStation Suite for gaming on Android tablets and cellphones. So what's the damage? Well, to start with, Nintendo's Q3 (October to December) operating profits were down 46 percent (104.6 billion yen ($1.3 billion) compared with 192.3 billion last year) on account of weaker Wii and DS sales coupled with a continued strong yen. The house of Mario also slashed its annual sales expectations projecting 16 million Wii consoles (down from 17.5 million units) and 22.5 million DS handhelds (down from 23.5 million) sold through March. It wasn't all bad news though as Ninty maintained its annual operating profit forecast of 210 billion yen assisted by a projected 25% increase in Wii software shipments. Mind you, that's not chump change, but gone are the days of the Wii / DS one-two knockout punch on the competition. And with a full quarter to go before the 3DS is launched globally, we're not expecting any improvement to the bottom line until the next fiscal year.
GameStop enjoyed sales of $1.9B in Q3; Kinect, Move in 'very short supply'
GameStop's money bin kept on filling up in the third quarter of its fiscal year, with the company reporting $1.9 billion in sales, up 3.5 percent from the same period last year. The company saw a profit of $54.7 million, up 4.8 percent from the $52.2 million from Q3 of last year. The top five selling games for the retailer during the period, ending October 30, 2010, were Halo: Reach, Madden NFL 2011, Fallout: New Vegas, NBA 2K11 and Medal of Honor. Gamasutra reports that during an investor call earlier today, company president Tony Bartel noted there is strong demand for both Sony's Move and Microsoft's Kinect. The company is "excited" to see that the peripherals are currently in "very short supply" and that they are bringing in an "expanded audience." Company execs believe the two items are comparable to the Wii in terms of bringing a different set of customers to stores.
Activision Blizzard posts better-than-expected Q3 results: $51m in profits on $745m in revenue
Thanks to "strong performance" from industry staples like Activision Publishing's Call of Duty franchise and Blizzard Entertainment's perennial MMO World of Warcraft and a stellar launch for Blizz's long-anticipated sequel StarCraft 2: Wings of Liberty, Activision Blizzard exceeded its prior third-quarter outlook of $600 million with net revenues of $745 million in the period ending September 30, 2010. Compare that to net revenues of $703 million for the same period last year. It also reported profits of $51 million for the quarter versus $15 million for the same period last year. "For the third quarter, we exceeded our net revenues and earnings per share outlook and delivered strong year-over-year growth," Activision Blizzard CEO Bobby Kotick explained. "Activision Publishing is about to introduce what is likely to be the biggest entertainment launch of the year with Call of Duty: Black Ops, followed by Blizzard Entertainment's World of Warcraft: Cataclysm, which we believe will deliver an incredible breadth of new content to the world's largest massively multiplayer online role playing game community." That's another way of saying, "If you think these Q3 numbers are great, wait until you see next quarter!" And with Q4 capping off Activision Blizzard's fiscal (and calendar) year, Kotick notes that things are looking better than ever for ol' Actiblizzard. "As a result of our over-performance, we are raising our calendar year 2010 net revenue and earnings outlook. We expect to deliver the most profitable year in our history with record operating margins." Specifically the publishing giant is raising its outlook for net revenues from $4.18 billion to $4.28 billion – shareholders should like the sound of that. Gamers will just enjoy Black Ops and Cataclysm. And gamers who are also shareholders can use some of that money to pay for the games you just bought. Investing!
Garmin officially exits the smartphone business, reports mixed Q3 earnings
Based on our experience with relationships, we've learned that it takes two to tango. It also takes two to produce co-branded wares, and with ASUS already withdrawing (respectfully, of course) from the ill-fated Garmin-Asus smartphone partnership, this here is more a formality than anything else. That said, those worried that Garmin would try to loop in another handset maker in order to manufacturer yet another Garminfone that 3.4 people would consider buying can rest easy. In the company's Q3 2010 earnings, it confirmed that it is "winding down" its smartphone efforts, and rather than continuing on a path to doom and destruction, it'll be ramping up marketing efforts in the aviation and maritime sectors. As for quarterly results, the company did see net income rise to $279.5 million (up from $215.1 million a year ago), but shares fell as it issued a depressing outlook for Q4 amid weakening demand for standalone PNDs. Hate to say we told you so...
Samsung notches record profits, aims to sell ten million Galaxy S phones this year
My, how a year changes things. Q3 2009 was a nightmare for mega-corps in terms of earnings, but things have definitely been on the up and up just 12 months later. After Sony pushed out a glowing quarterly report this morning, rival Samsung has done likewise. The company saw record breaking revenues of ₩40.23 trillion ($35.8 billion) as well as profits (₩4.46 trillion; $3.96 billion) in this most recent quarter, with Sammy crediting strong semiconductor performance for the bulk of its newfound fortune. A tip of the hat was also given to its mobile communications business, with the outfit moving a staggering 71.4 million phones during Q3 2010 (a 19 percent boost year-over-year). Reports are noting that between five and seven million of those were of the Galaxy S variety, and it's hoping to sell ten million of 'em before the close of this year. All that said, the firm isn't expecting an equally rosy Q4, noting that a strengthening won and heightened price pressures around LCD panels and DRAM could put a damper on skyrocketing profits. So much for taking a day to celebrate, eh? [Thanks, Rajendra]
Sprint fails to impress Wall Street with Q3 2010 earnings, still notches 644k net adds
Sprint certainly isn't out of the woods yet, but at least it's picking up customers from somewhere. The company's Q3 2010 earnings were ushered out today, and while its stock fell around ten percent on the news, a few silver linings were present. The carrier saw postpaid subscriber losses of 107,000, but that's an 87 percent improvement compared to Q3 2009. The CDMA network added approximately 276,000 postpaid customers during the quarter, 471,000 (net) prepaid subscribers and 644,000 total wireless subscribers from a net perspective. It also landed its second best postpaid churn result ever, but the bottom line still looks battered -- the operator announced a net loss of nearly a billion dollars ($911 million, if you're scouting specifics). Of course, phasing out iDEN should probably help things in the long run, but even its 4G advantage could quickly fade if (or more likely, when) Verizon gets its LTE act together next year.
Verizon adds fewer customers than AT&T in Q3, race for first place gets tight
By subscriber count, Verizon had vaulted into first place by a pretty comfortable margin following its Alltel acquisition, but AT&T added significantly more customers this last quarter than Big Red did -- and just like that, the battle for first place among the US national carriers is starting to get hot again. Verizon added 997,000 customers (excluding acquisitions) in the July through September period versus AT&T's beefy 2.6 million, meaning AT&T now stands at some 92.8 million -- just 400,000 or so fewer that Verizon's headcount. Nothing like an exclusive iPhone launch to give you a little boost, right? On the plus side, Verizon's postpaid churn in the quarter was low at 1.07 percent, and Verizon Communications as a whole earned 31 cents per share -- lower than its second quarter pre-adjustment EPS of 58 cents, but a heck of a lot higher than the 7 cent loss it actually posted in Q2. Outside of wireless, the company added 226,000 and 204,000 FiOS internet and television customers, respectively, bringing the totals to 3.9 and 3.3 million; FiOS ARPU is up nearly 11 percent year over year, and the company claims that its FiOS business now represents about half of its consumer revenues -- pretty impressive. Follow the break for Verizon's full press release.
AT&T clocks up 2.6 million net new wireless subscribers, bigger profits in Q3
AT&T's balance sheet just keeps looking happier and happier every quarter. In spite of the company's somewhat questionable hardware choices -- such as picking the ugly option from both Samsung's and LG's Windows Phone 7 platters -- it now proudly boasts a total of 92.8 million active wireless service lines. This comes off the back of a 2.6 million net subscriber gain over the third quarter of 2010, a record for this period of the year. Churn, or the rate at which people left AT&T, was also at its best ever for the quarter, coming in at a lowly 1.32 percent, while postpaid integrated device (read: smartphone on a contract) activations reached above the eight million mark. Total net profit was $12.3 billion, thanks to the sale of Sterling Commerce and a one-off tax adjustment, but in cashflow terms the company made $4.0b in the quarter. That's a lot of dinero, no doubt aided by Q3 being the first full reporting period after the iPhone 4's launch, we just wish some of AT&T's other phones weren't quite so unappealing.
Nokia reports improved earnings for Q3 2010, will still 'streamline' up to 1,800 employees out of a job
Nokia's quarterly results have just been made public and the company's devices plus services sector has actually improved its income relative to last year: €7.2b of revenue was collected over the past three months versus €6.9b in the same period a year ago. Operating profit has also pepped up, going from the previous €785m to €807m. You'd think this would augur well for Stephen Elop's beginning at the helm, but the new man in charge is also presiding over a fundamental restructuring of operations at Nokia, which is expected to result in the redundancy of up to 1,800 employees globally. There are no specifics to tell us who'll be losing out, but the aims are the boilerplate tasks of increasing efficiency, simplifying operations, and reducing time to market. Anyway, we doubt the great people of Finland will be pleased.
Netflix 'now primarily a streaming company,' could offer DVD-less plan this year
It seems like just yesterday we were celebrating Netflix's 2 billionth disc sent, but in announcing the company's Q4 financial results, CEO Reed Hastings called his baby "primarily a streaming company that also offers DVD-by-mail." Other notes include an indication that a streaming only plan for US customers, mirroring its offering in Canada, currently in limited testing could become widely available later in the fourth quarter of this year, with a potential that "pure streaming" could become the core package for Netflix going forward while DVDs might require a premium service charge like Blu-ray does now. So what comes next? If all goes according to plan, expansion beyond North America in late 2011, continuing to add more streaming content and improving the UI on other devices.
HTC grows profits in Q3 to $360 million, revenues rise to $2.45b
It's good to see that HTC's omnipresence in the smartphone market is paying off in nicely growing financial figures as well. Having reported $268 million in profit for Q2, the Taiwanese company is today touting a $360 million tally for the period between July and September 2010. Android is again fingered as the chief catalyst for this growth, which is best illustrated by comparing numbers to last year, when HTC managed to pull in $184 million during Q3, or almost exactly half of this year's haul. Total revenues were also appropriately inflated, up to $2.45 billion, and analysts seem in agreement that HTC's future is looking rosy. So long as the G2 hiccups remain an isolated incident, that should indeed be the case.
Red Dead Redemption pushes Take-Two Q3 revenue up to $354.1 million
Take-Two has reported that net revenue for its third fiscal quarter, which ended July 31, 2010, reached $354.1 million -- an increase of $259.2 million over the same period last year. The company attributed the rise primarily to Rockstar's Red Dead Redemption, which has shipped more than 6.9 million units life-to-date. And while several older games, including Grand Theft Auto: Episodes from Liberty City, NBA 2K10 and Borderlands, contributed to overall sales at retail, Take-Two highlighted digitally distributed content as a "meaningful component" of this quarter's outcome. Operating income for the quarter landed at $12.4 million, a big turnaround compared to the $58.3 million loss suffered in the same quarter during 2009, and a minor dip from Q2 2010's $16.9 million. Take-Two's fourth quarter won't benefit from Red Dead's landing impact, but the company already has an extensive lineup of DLC planned for the coming months.
HP reports Q3 2010 earnings, posts $2.3 billion operating profit
And to think -- that $2.3 billion figure might have been a few million higher if not for the absurd Golden Parachute that Mark Hurd will continue to float on for centuries to come. All jesting aside, HP published its Q3 2010 financials today, reporting a healthy $2.3b in operating profit (not to be confused with net income, which deducts those massive corporate taxes) and a five percent increase year-over-year. All told, third quarter revenue was listed at $30.7 billion (an 11.4 percent uptick from last year), with a "record" amount of services signings. Interestingly, a whopping 63 percent of total HP revenue came from outside of America, though we're struggling to find any specific mentions of Hurd or Palm in the release (embedded after the break). We'll be checking in on the press call shortly -- we'll let you know if anything crazy goes down.
Guitar Hero: Warriors of Rock takes the stage September 28
Anxious to get your hands on Activision's werething-infused rock-em-up, Guitar Hero: Warriors of Rock? Activision revealed a launch date for the game during its annual investors call last night: September 28 (September 24 in the UK). For those of you keeping score at home, that's a full month before the arrival of its competitor, Rock Band 3, which is set to launch on October 26. Outside of being compatible with "your existing Guitar Hero music library," Warriors of Rock adds 95 new tracks into the mix, including re-recordings from Alice Cooper and The Runaways. Additionally, if you're one of the first million to purchase the game in North America, you get a free Soundgarden album.
