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October 15, 1998

NINTENDO AFFECTS MIPS REVENUES, BUT NEW BUSINESS IS UP

By CBR Staff Writer

MIPS Technologies Inc reported income of $3.3m for its first quarter yesterday, down from $4.6m in the previous quarter, while revenues rose 12% from the previous quarter to $12.3m. The drop in income reflected a provision of $2.2m for income tax, where the previous quarter had no tax effect. MIPS went public on June 30 after its spin-off from Silicon Graphics Inc. Pre-IPO revenues for last yearÆs quarter were $15m, and losses were $5.4m. MIPS says the sequential revenue rise was driven by an increase in both contract and royalty revenues. The year-on-year decline, however, was attributed to a drop in royalties from the graphics chip included in Nintendo CoÆs Nintendo64 games player, partly offset by an increase in royalties from Nintendo game cartridge sales. The future of the crucial Nintendo contract, from which MIPS has in the past derived up to 80% of its revenues, is currently unclear. MIPS CEO John Bourgoin highlighted the companyÆs new alliance with Broadcom Corp in the quarter, which is adopting the MIPS architecture for cable modems and digital set-top boxes. Other design wins in the quarter included Minolta Corp’s Dimage digital camera, NEC CorpÆs SuperScript 4400 laser printer and Extreme Networks IncÆs Summit 47 desktop switch. But also in the quarter, Compaq Computer Corp’s Tandem division made the decision to move its systems to the Alpha chip, leaving MIPS without any systems OEMs at all. MIPS had already made the decision to concentrate on the embedded systems market. It says it has now shipped over 100m processors in total.

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