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As WP's managing editor, I edit review and preview articles, attempt to keep up with the frantic pace of Rainier's news posts, and keep our reviewers on deadline, which is akin to herding cats. When I have a moment to myself and don't have my nose in a book, I like to play action/RPG, adventure and platforming games.


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Midway Remains Optimistic Despite Revenue Drop

by Judy on Aug. 3, 2006 @ 5:48 p.m. PDT

Midway today announced financial results for the second quarter ended June 30, 2006. Quarterly net revenue was $25.9M, compared to $36.9M at the same time last year, and net loss clocked in at $31M, which is a small increase over the previous year's Q2 loss of $29.9M. Midway anticipates similar numbers for Q3 but expects Mortal Kombat: Armageddon to buoy Q4 results.


Net revenues for the 2006 second quarter were $25.9 million, compared with 2005 second quarter net revenues of $36.9 million. The 2006 second quarter loss applicable to common stock was $31.0 million which includes $0.9 million of stock option expense, or a loss of $0.34 per share, compared with a 2005 second quarter loss applicable to common stock of $29.9 million, or $0.35 per share.

Other financial and operating highlights during the second quarter of 2006 include:

  • Midway launched NBA Ballers: Phenom for PlayStation 2, Rampage: Total Destruction for PlayStation 2 and Nintendo GameCube, NBA Ballers: Rebound for the PSP, and MLB Slugfest 2006 for PlayStation 2 and Xbox;
  • Midway also launched Rise & Fall: Civilizations at War worldwide for the PC, which charted as the #1 PC title in the United Kingdom for the three weeks following launch according to Chart-Track;
  • Several of Midway's games shown at this year's E3 trade event in Los Angeles received awards and critical praise including Stranglehold with IGN's PC "BEST ACTION GAME" and GamesRadar's "TOP 5 XBOX 360 GAMES," as well as accolades and nominations for Unreal Tournament 2007, Mortal Kombat: Armageddon, and The Lord of the Rings Online: Shadows of Angmar;
  • Midway announced this week that, in addition to the expected Fall releases of Happy Feet and The Ant Bully for the Nintendo Wii, it will add two more games to its Wii lineup: Rampage: Total Destruction, scheduled for release in the fourth quarter, and Mortal Kombat: Armageddon, scheduled for release in first quarter 2007;
  • Blitz: The League, after reaching Greatest Hits status for the PlayStation 2 and Platinum Hits status for the Xbox during the quarter, has shipped over 1 million units in North America. On the heels of this success, Midway expects to release Blitz: The League for Xbox 360 and the PSP this Fall;
  • In May 2006, Midway completed the private placement of $75.0 million of 7.125% Convertible Senior Notes due 2026. Midway anticipates using the net proceeds of approximately $72.7 million for general corporate purposes; and
  • Midway announced the election of Robert J. Steele to the Board of Directors at its 2006 Annual Meeting of Stockholders that was held Thursday, June 22, 2006.

David F. Zucker, president and chief executive officer, commented, "Second quarter results were in line with guidance, and we are especially pleased by the European performance of Rise & Fall, a new intellectual property, which topped the PC charts in the United Kingdom for the first time in Midway's history, demonstrating our new European team's ability to execute."


For the quarter ending September 30, 2006, Midway expects net revenues of approximately $24 million, with a net loss of approximately $23 million. For the third quarter, Midway has already released The Ant Bully for PlayStation 2, GameCube, GameBoy Advance and the PC. During the remainder of the quarter, the company expects to release Spy Hunter: Nowhere to Run for PlayStation 2 and Xbox. For the year ending December 31, 2006, Midway continues to expect revenues of $155 million driven by major fourth quarter releases of Happy Feet and Mortal Kombat: Armageddon. The company now expects a full year net loss of approximately $70 million, compared to our prior guidance of $66 million. The increase in net loss is primarily due to costs associated with our recent convertible debt offering completed May 30, 2006. The full year guidance includes approximately $3 million of stock option expense.

Mr. Zucker commented, "We are continuing to position Midway to succeed in the next console cycle, and we believe we have demonstrated to gamers and investors at this year's E3 conference that we have a strong line-up both short term, with upcoming releases of Mortal Kombat, Spy Hunter, Happy Feet, and Blitz: The League for Xbox 360 and PSP, as well as longer term for next generation and PC markets with Stranglehold, Unreal Tournament 2007, The Lord of the Rings Online, and The Wheelman. We continue to believe that 2007 will show our true potential and the reemergence of Midway as a top tier video game publisher."

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