Midway's Q3 Net Loss More Than Doubles to $75.9 Million

Can it get much worse for Midway? The publisher said it's "addressing critical issues," but in the meantime major losses keep piling up.

by James Brightman on Monday, November 10, 2008

Midway Games has announced its third-quarter fiscal results for the period ended September 30, and as has been the pattern for the last four years with Midway, it wasn't very good. The publisher's net loss jumped from $33.5 million to $75.9 million. Net revenues, however, did rise from $36.7 million to $51.4 million.

"During the third quarter, Midway executed on several operational milestones, including the combination of its Southern California studios, the optimization of its Austin facility and cancellation of an associated unannounced game, and the entrance into a receivables factoring agreement to offset the costs related to manufacturing its fall game releases," the publisher stated. "These operational milestones, combined with the Company's favorable exit from underperforming licenses early in the fourth quarter, are designed to ensure successful launches, minimize costs, and focus resources on Midway's strongest licenses, core game franchises such as Mortal Kombat, TNA iMPACT! and Wheelman, as well as future licenses and new IP."

"In the second and third quarters of 2008 we have focused on addressing several critical issues that were affecting the ability of our company to achieve success, and the third quarter results and associated non-cash charges reflect that effort," commented Matt Booty, president and CEO. "Our current focus is the upcoming launch of Mortal Kombat vs. DC Universe, which aligns our Company with the exceptional Warner Bros. brand of DC Comics. We expect that the fourth quarter will represent significant progress toward completion of these efforts, and that we will enter 2009 with a renewed focus on Midway's key strengths."

Midway's fourth quarter will rely largely on the aforementioned Mortal Kombat vs. DC Universe (hitting stores on November 16 for PS3 and 360) as well as the already released Blitz: The League II. Game Party 2 for Wii and Touchmaster II and Mechanic Master for Nintendo DS are also expected to contribute.

Midway is expecting revenues of $105 million with a net loss of approximately $0.20 per share for Q4. For the full year ending December 31, the company anticipates sales of $210 million, with a net loss of approximately $1.78 per share.

Earlier today, Midway announced that Shari Redstone resigned from the company's board.

via GameDaily