MIPS Technologies Inc has reported solid fourth quarter and final year results, bolstered by still buoyant revenues from its Nintendo N64 console contract. The company reported revenues of $71.1m for FY99, up 37% on the $56.8m generated in 1998. Revenues for the quarter stood at $17.8m, up 62% on $10.9m in the fourth quarter last year. Net earnings per share for the quarter were two cents over First Call analyst estimates of $0.10 per share.

Of the revenues MIPS made in FY99, 71% came from sales of Nintendo consoles and games. MIPS makes such a large proportion from Nintendo because the cartridge-based games system also uses MIPS chips in each cartridge, so MIPS makes a royalty on every game sold for the Nintendo platform. However, as Nintendo and others roll out new consoles, sales of the N64 are expected to roll off. Although, MIPS CEO, John Bourgoin said that Nintendo are bullish about the run-up to Christmas 2000. We continue to be encouraged about what we might see in 2000, he commented.

However, MIPS expects to see revenues remain flat or slightly increase over the next three to four quarters and start to increase after that. MIPS has several chips in the new Sony Playstation 2, which Bourgoin expects to be a high volume deal for MIPS, but not in the same league as the Nintendo contract, because the Sony system uses DVD disks as its storage mechanism – robbing MIPS of the extra cartridge royalties. Bourgoin says that he expects revenues to come online from Sony machine in June next year, at the earliest.

To fill the hole left by Nintendo, MIPS expects to see revenues the set-top box market – highlighting its Broadcom deal as a major piece in that jigsaw – and in chips used in routers and switches. The company also sees itself as a major player in the CE handheld space, supplying companies such as IBM Corp, Philips Electronics and Casio with chips for their CE devices. However, Bourgoin cautioned that he didn’t expect the CE market to become a volume prospect for another year or two.

MIPS’ main competition in the market comes from ARM Holdings Plc, Bourgoin said, particularly for low power applications that don’t require cutting edge performance. ARM is especially strong in providing chips for the cellphone market, where MIPS admits to be being a minor player. Bourgoin said that he did not expect that this would change overnight, but he expected to score some more wins as handheld computers and cellphones converged into devices requiring more computing power. In the higher end of the market, Bourgoin claimed that MIPS ruled the roost admitted to some competition form IBM/Motorola’s PowerPC chips and occasionally the Hitachi SH-4 processor. á