French games software developer Infogrames Entertainment SA reported a 39% increase in net profits in its first half ended December 31 on revenue up 36%, and also announced the completion of its $40m acquisition of UK sports games developer Gremlin Group Plc (CI No 3626).
Infogrames CEO Bruno Bonnell said the company is on track for full-year revenues of FF1.9bn ($312m) for the 12 months through June 30, with its strategic goal for the 2000/2001 fiscal year being $1bn. Chief operating officer Jean Marie Duras said sales are still concentrated primarily in Europe, which was responsible for 73% of revenues in the first half.
The US represented 20% of sales, up from 13% in the previous fiscal year, and is clearly one of the company’s strategic targets in the medium term. For now, however, the priority is to strengthen Infogrames’ position in Europe, where, in addition to acquiring Gremlin, it has also set up a Swiss subsidiary and acquired distributors in Spain and Portugal recently, as well as taking over the development team of fellow French company Psygnosis.
With regard to the breakdown of revenues by format, 60% came from what Bonnell referred to as next-generation consoles (i.e. Playstation and Nintendo 64), 29% from CD-Rom, 10% from 8- and 16-bit consoles and 1% from licenses. Duras said the next-generation console segment was divided 70/30 in Nintendo’s favor in the first half, but that balance should approach 50/50 by the end of the second half, as Infogrames has a number of launches into the Playstation market.
Bonnell sees the PC market going through a segmentation over the next couple of years, driven by falling hardware prices, until some models become little more than game machines, just as manufacturers are now launching internet-specific desktops.
Work is currently underway on putting more sophisticated games into the portable phone space as that, in turn, converges with computing. Bonnell said he envisions the emergence of a nomadic interactive entertainment market based on visiophones and mobiles, though he does not expect it to happen for another couple of years.
