In the third quarter ended December 31, 3DO saw revenues of a mere $4 million, down from $15.2 million last year. This is mostly due to the fact that as with the previous quarter, 3DO did not release any key new product during the period – choosing instead to spend the time restructuring and improving the quality of its 2004 release slate.
As a result of the low activity at the company, losses were also down for the quarter, albeit still significant. 3DO saw losses of $7.7 million, a year on year improvement on last years $26.8 million loss. Vitally, the company believes that it can now return to profit in the next quarter – with nine product releases planned during the period.
Indeed, much of the restructuring of the company is now complete by all accounts, and game releases will proceed regularly from March onwards, with between four and six games planned for every quarter in fiscal 2004.
3DO has completed its difficult transition from large publisher (with large overhead) to opportunistic, low cost publisher, according to Wedbrush Morgan analyst Michael Pachter. The company showed tremendous financial discipline and implemented significant cost controls in Q3, giving us some confidence that it has a good chance to meet its goal of returning to profitability in Q4.
Wedbrush Morgan is retaining its Hold rating on 3DO stock, however, adopting a wait and see stance on the company’s fortunes which is likely to be followed by many in the financial community.
Source: Gamesindustry.biz
