The company saw losses of $24.7 million in its final quarter, compared with a much smaller loss of $2.7 million in the same period one year ago. For the full year, Midway lost $53.8 million – a slight improvement over the $61.4 million loss in the previous year, but disappointing nonetheless. On a more positive note, the company’s full-year revenues rose 65 per cent to $191.9 million.
Much of the difficulty in the fourth quarter is attributed to the underperformance of key releases. Although the company had a hit with Mortal Kombat: Deadly Alliance (released in Q4 in the USA, although it only hit shelves here in the past fortnight), it saw extremely poor performance for its other titles – Defender, Dr. Muto and Haven: Call of the King.
The company’s figures were not helped by a $12.1 million asset write down charge, and ongoing restructuring at the company means that it is likely to post a loss of around $5.5 million for the current quarter, including a $6.2 million restructuring charge. Restructuring activities to date have left Midway with eight internal teams employing 300 developers.
The publisher does expect a return to profitability in 2003, however, with full-year revenues predicted at between $250 and $275 million, and a profit (pre-tax) of between $20 and $30 million on the cards. Much will depend, however, on Midway’s ability to woo the market with high-quality extensions to its franchises, such as Mortal Kombat: Deadly Alliance. Poor titles threaten the company’s future not only in terms of short-term losses, but by devaluing the IP they’re based on – and that IP remains arguably Midway’s most valuable asset.
