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SouthPeak doubles game sales in 2009 amid dropping profits

by Ben Gilbert { Oct 15th 2009 at 12:30AM }

Though SouthPeak is keen to point out that its net revenues rose from last year by $7.2 million, the company's profits for the year remain firmly in the red, with a $12.1 million posted loss for the 2009 fiscal year ending June 30. SouthPeak's loss report comes confusingly paired with a 100% increase in units sold from fiscal year 2008 (from 1.2 to 2.4 million units) -- 2009's posted $12.1 net loss gets explained away by "approximately $12.5 million invested in game development and intellectual property for future title releases," among other things.

The report also allows "$1.6 million of expenses relating to the Gamecock acquisition," hopefully some of which went to paying Gamecock debt now owed by SouthPeak -- this on top of another $4.6 million or so for "charges relating to write-downs on software values and sequel right values to certain titles." Unsurprisingly, the publisher hopes that upcoming titles Two Worlds 2 and My Baby: First Steps, as well as a "highly-anticipated sequel to Dementium," will bolster its next fiscal year. We're just hoping the games the company does sell will actually garner some profit this time around.

Ubisoft's net profit declined 37 percent in past fiscal year

by Griffin McElroy { May 29th 2009 at 12:30AM }

It's time for another installment of "Sales Go Up, Profit Goes Down," the completely perplexing economic phenomenon that's been taking the gaming industry by storm as of late. Today's contestant is Ubisoft, who in April reported a 14 percent annual sales increase over the past fiscal year, from €928.3 million to €1.06 billion, yet recently revealed it had experienced a 37 percent (or €31 million) decrease in net profit during FY 2008.

This might sound bad, but Ubisoft CEO Yves Guillemot said during a recent investor conference call he was pleased his company could, "offer superior quality games, while maintaining a high level of profitability." Oh, let's not forget the company's projected €1.1 billion sales target for the next fiscal year. With the amount of stuff the developer is working on, figures that huge wouldn't surprise us.

NCsoft has solid Q1 sales, profits thanks to Aion

by Alexander Sliwinski { May 11th 2009 at 2:00PM }

NCsoft is apparently off to a good start in 2009 -- notwithstanding Richard Garriott's lawsuit -- thanks to "solid maintenance" of Lineage and Lineage II, along with sales of its new MMO, Aion. The publisher's sales were up 51 percent year-over-year to $107.7 million in the first quarter, with net income enhanced to $27 milllion, a 315 percent increase. It appears the Korean-based company's numerous international workforce cuts paid off.

NCsoft's CFO, Jaeho Lee, was happy that Aion's launch did not affect the performance of the Lineage series in Korea. Now we wait to see how the rest of the globe embraces Aion. The MMO is prepped to launch in China during Q2, with other major markets set for the second half of the year.

Gameloft cares not for recessions, sales up in Q1

by Alexander Sliwinski { Apr 29th 2009 at 1:00AM }

Gameloft announced today that sales were up 22 percent year-over-year for its first quarter and the mobile publisher took in $40.2 million in sales. Mobile games represented 94 percent of the haul, with North America increasing sales 57 percent over last year -- Gameloft should send Apple a gift basket of thanks for the iPhone.

Gameloft already has plans to jauntily expand more into the console space, but the company knows where its bread is slathered with butter, as evidenced by alleged talks with Microsoft to develop titles for Windows Mobile. Overall, the publisher plans to grow its revenues and be even more profitable in 2009. What recession?

Gameloft says: Recession? What recession?

by Jason Dobson { Mar 23rd 2009 at 9:20AM }

As the dwindling economy has most companies checking their coffers for cobwebs, developer-publisher Gameloft is sipping mojitos and enjoying a refreshing 15 percent uptake in its revenue over the previous year. In 2008, the company boasted revenue of 110.3 million euros, or $149.6 million, with profits likewise surging up 15 percent to $4.4 million during the fiscal year.

Console releases were responsible for just 7 percent of Gameloft's results, though with the company set to deal Uno onto every platform imaginable this may soon change. For now, however, it's mobile games that are responsible for the lion's share of Gameloft's newfound wealth, making up 93 percent of the company's sales as even the unemployed refuse to give up their casual shovelware fix.

GameStop used games revenue estimated to be $2 billion

by Alexander Sliwinski { Jan 23rd 2009 at 11:25AM }

GameStop's revenue on used games is estimated to reach $2 billion this fiscal year, ending January 31. The figure represents almost 23% of the unstoppable corporation's revenue, and is $400 million more than the prior year. The Wall Street Journal notes that about 42% of the company's profits come from used game sales.

Further on in the piece, the WSJ covers how publishers are trying to incentivize customers to buy new, by adding extra content that can "only be used once." It leads by using Gears of War 2's "Flashback map pack" as an example of "an effort to diminish the appeal of buying a used game." That certainly would be worth noting, if the pack wasn't available to purchase now on XBLM for $5.

[Via Edge]

Reeves: PlayStation 'on target' to start earning profit

by Ludwig Kietzmann { Jan 6th 2009 at 9:35AM }

Step 1: Release PlayStation 3.

Step 2: ?????

Step 3: Profit!

David Reeves, President of Sony Computer Entertainment Europe, believes that Sony is "on target" to figure out that elusive second step. "The most important thing for us as a company in the very short term is for us to start making money," Reeves explained rather candidly in a recent article on the official PlayStation website. "This is a pledge that was made last March and is something that we are still very much on target to achieve." His tone was considerably more positive than one adopted by recent rumors, which have Sony on the "brink of upheaval."

Quizzed -- or rather, politely asked to contribute in a promotional piece -- about 2009's most exciting developments, Reeves noted that once the company's flagship system is out of the financial woods, things will really take off for PlayStation and its fans. "2009 promises to be a very exciting year for PS3, with blockbuster titles such as Heavy Rain and Killzone 2 coming out, whilst we have the music and video download service becoming available towards the end of the year," he said. And don't forget about our pal, the PSP, which will have games taking "full advantage of the new enhanced screen."

Forbes: Nintendo making $6 profit on every Wii sold

by Randy Nelson { Dec 1st 2008 at 10:00PM }

While Sony and Microsoft dream of turning a profit on their consoles, Nintendo is doing just that. According to a new article from Forbes, the Big N makes $6 in operating profit from every Wii unit sold. Nearly 19 million units have been sold worldwide so far during 2008, earning Nintendo a tidy $114M in profit, taking that $6-per-system figure into account. That's not the extent of the interesting numbers in the article, though.

Forbes points out that, while Nintendo is turning a profit on hardware, the fact that its top-selling software is all first party means it is losing out on serious revenue normally brought in via licensing fees. Still, according to its figures, the magazine claims that there will be in the neighborhood of 100 million more pieces of Wii software sold in 2008 (220M) than the nearest competitor, Xbox 360, at 125M (PS3 is on track for 120M). One has to wonder, though, how many of those Wii games will be snagged from a bargain bin, given recent analyst data.

Nintendo making six bucks on every Wii sold

by Chris Greenhough { Dec 1st 2008 at 3:38PM }

Macquarie Securities analyst David Gibson has used Science to calculate that Nintendo makes $6 from every Wii console snapped up by the public. It's long been known that Nintendo profits from its hardware, though how much has never been revealed.

If Gibson's sums are accurate, that means Nintendo made almost $4.2 million of profit from North American Wii hardware during October alone. Six dollars, for the record, is what we almost earn in a whole day of blogging. That kind of money will get you one-fifth of this amazing Wii Music add-on set!

Gibson also states that Microsoft breaks even with the Xbox 360, while Sony loses cash whenever it sells a PS3. Sadly, he doesn't say how much Sony drops, so we can't point and laugh.

[Via MCV]

Microsoft's Xbox division turns Q1 profit, ships 2.2 million consoles

by Ludwig Kietzmann { Oct 24th 2008 at 9:25AM }

Good news, everybody (concerned with the financial prosperity of a gigantic corporation)! Microsoft's fiscal Q1 2009 results, which cover the three-month period ending September 30th, 2008, show that its Entertainment and Devices Division -- the same one responsible for the entertaining device known as the Xbox 360 -- managed to turn a profit once again. According to Gamesindustry.biz, quarterly income rose to $178 million, an approximate 6.6% increase over last year's $167 million.

In less financially fortuitous news, overall sales were down from $1.929 billion to $1.814 billion (no Halo 3 this year, remember?) compared to Q1 2008, and revenue from the Xbox 360 and PC platforms went down by 22%. Though Microsoft still shifted 2.2 million consoles, the EDD was greatly aided by sales of Mac software, mobile device applications and the Zune. Seriously, people, we can't keep making fun of it if you actually go and buy the darn thing.

PS3 profitability cast in doubt, 2008 earnings forecast grim

by Andrew Yoon { Oct 23rd 2008 at 9:45AM }

If you've opened a newspaper, turned on the TV, or looked at your stock portfolio, you must know the story: the global economy is in shambles. And that hurts large global companies, like Sony. Sony has updated their 2008 forecast, slashing profit expectations 38% to to 150 billion yen ($1.5 billion). A strong yen makes Sony, a export-centric company, do worse. The global downturn in the economy is likely to strongly the affect the sales of their top-ticket items, such as high definition TVs, cameras.

In spite of promises to make the PS3 profitable this year, it appears that may be cast in doubt. With the system significantly more expensive than its competitors, and a price drop not likely in the immediate future, this holiday season may not continue PS3's momentum from the beginning of the year. That's a shame too, considering the slew of high quality titles that's just about to come about.

"This is just the beginning of a big earnings collapse," said a Tokyo-based analyst to Forbes.com. "Given the track record of this company, it will under-deliver all the way." He added that there is a "good chance" Sony will post a loss this year.

[Via Joystiq; Image from The Brokers With Hands On Their Faces blog]

Nintendo's 'profits per employee' are higher than Goldman Sachs

by Alexander Sliwinski { Sep 16th 2008 at 6:00PM }

If there was ever any question as to how obscenely rich Nintendo is, the Financial Times has crunched some numbers to show the cash flow, per employee, at the House of Mario. The newspaper estimates that Nintendo produces more than $1.6 million per employee -- that's more than investment bank Goldman Sachs' $1.24 million per employee during its best year in 2007.

There are some caveats to the information, most of which revolve around how much outsourcing the Big N does. Nintendo makes so much money for having so few employees (3000 full-time), because many of the company's necessities (external development, manufacturing, public relations, etc.) are handled by outside companies. Also, don't think this means that Nintendo is compensating its full-time employees too generously. Goldman's average (by mean) employee received $660,000 in 2007, while the average salary at Nintendo was $90,900.

[Via GameDaily]

Infogrames, Namco Bandai strike distribution deal

by Jason Dobson { Sep 9th 2008 at 7:30PM }

After getting the unfamiliar taste of profit out of its mouth, Infogrames is hungry for more. To this end, the parent of oft-addled Atari announced that it has cozied up to fellow publisher Namco Bandai to handle distribution of the latter's titles in both Europe and Asia. GI.biz writes that Infogrames' distribution activities in those regions will be consolidated as a result of the agreement, with Namco Bandai taking ownership of some 34 percent while leaving the remainder in the hands of Infogrames itself.

According to the report, Infogrames expects to find its wallet pleasantly filled with added revenue as a result of the deal thanks to added efficiency and every Economics major's favorite phrase -- economies of scale. The report further notes that Infogrames is also open to partnering with other companies over similar deals in the pursuit of greater profitability, no doubt helped when not weighed down by any pesky big budget monkeyshines.

Pachter: Majesco 'close' to turning a profit

by Jason Dobson { Sep 9th 2008 at 11:00AM }

Of course, as the saying goes, close only counts in horseshoes and things that go boom. Regardless, Wedbush Morgan's most outspoken soothsayer predicts that troubled publisher Majesco is "close to returning to profitability." Good for them, we say, though in the face of waning share prices and delisting threats, the company needs more than encouraging analyst comments to help push it to the top of Money Mountain.

Pachter bases his expectations for the publisher on tweaks made to the company's sales and cost management, as well as growth that, according to the analyst, has been managed "prudently." We'll see if the company can meet the firm's expectations of $10 million in revenue for the quarter when Majesco reports its Q3 2008 earnings on Thursday.

The Sony Hardware Reciprocal: PS3 losses surpass PS2 profits

by Kevin Kelly { Aug 19th 2008 at 5:27PM }

According to DFC intelligence figures cited by Dave Perry, Sony has lost more money on the PlayStation 3 hardware than it made on the PlayStation 2 during its five most popular years. In pure numbers speak it's lost $3 billion on the PS3, which is about equivalent to everything it made selling PS2s during its peak years. This story would actually have a lot more impact if Carl Sagan was around to say "beelyuns."

Perry, best known for his stint at Shiny Entertainment, was speaking at the really long-named Games Convention Developers Conference, which appears to be both a Convention and a Conference, and was just using the figures to underscore how much Sony was spending on hardware development. However, the 1UP article doesn't mention until near the end that the original PS2 lost money in its first year, and that Sony (and the other console makers) does this so it can make bank on the software/games that people need to fuel their systems.

In all fairness, the article goes on to explain that Microsoft lost $4 billion on the original Xbox, and has had to spend over $1 billion replacing faulty hardware in the 360 and extending the warranty for original purchasers. So, we tend to think $5 billion trumps $3 billion. The real winner in this struggle? Nintendo. It has been churning a profit on that little Wii since it hopped out of the gate. Rassin' frassin' wand-wagglin' profiteers.