Eidos pays PlayStation penalty

Eidos has blamed the change in its business strategy and the late release of PlayStation 2 for falling revenues in the third...

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.

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