Eidos has blamed the change in its business strategy and the late
release of PlayStation 2 for falling revenues in the third
quarter.
The games vendor saw revenues plummet from $98.5m (£65.7m) in the
three months to 31 December 1999 to $83.5m in 2000. But losses
improved by 43.5 per cent to $14.3m.
CEO Mike McGarvey said: “Based on current market conditions, we
believe these results are satisfactory.” Moving forward, McGarvey
said, the company felt “confident that the strategy of developing
and publishing games based on core brands and franchises and
combined with sustained review and reduction of our fixed cost base
should allow us to return to profitability in the next financial
year”.
Chairman Ian Livingstone added that changes to the release
schedule will push titles planned for this quarter into the next
fiscal year.
“The delay to the release schedule has caused us to
significantly revise downwards our expectation for the current
financial year,” he revealed.
But Livingstone added Eidos had already cut operating costs by
10.8 per cent and would continue to reduce items such as travel
expenses.
Eidos hopes that new consoles from Sony, Microsoft and Nintendo
will drive demand for its games, but Livingstone admitted: “Sony’s
recent manufacturing difficulties and the postponement of
Microsoft’s Xbox launch in Europe, means the company remains
cautious about trading over the next nine to 12 months.”
On a positive note, McGarvey predicted its recently signed deal
with Nokia to provide games for WAP phones would create a big
revenue opportunity for Eidos.