UK development studio Argonaut has announced its interim results for the six months to January 31st, with the below-expectations performance of pre-Christmas releases precipitating deepening losses for the group.
The company recorded a pre-tax loss of Â£2.4 million on turnover of Â£4.4 million, compared with a loss of Â£1.1 million on turnover of Â£6.9 million in the same period twelve months ago.
The bulk of Argonaut's turnover in the period came from advances on new projects, with only Â£0.5 million of royalty income - the bulk of which is attributable to continued sales of the Harry Potter PSone titles which the company created for EA.
Despite the developer finishing three titles on time for Christmas, with SWAT:GST, Bionicle and I-Ninja all completed on schedule, sales of the games were below expectations (although by no means terrible) and as such did not generate any royalty revenues.
The results are disappointing for Argonaut, which has generally been performing extremely well in development terms over the past few quarters - delivering titles on time and receiving strong critical praise for I-Ninja and, to a lesser extent, for SWAT.
However, the outlook is better going forward, with three titles to be released in the current period under royalty-only publishing deals (Malice, Carve and Powerdrome, with Carve being the company's first Xbox Live title), and a major contract to develop Catwoman for Electronic Arts.
The company, which has also been hit by the plummeting US Dollar making UK development studios very expensive for US publishers, remains optimistic about its prospects - and still has a good cash balance of Â£4 million, albeit significantly reduced from the Â£8.6 million balance held twelve months ago.
"In this very difficult market we firmly believe Argonaut's ability to develop top quality games to schedule will continue to attract the major publishers," affirmed Argonaut chairman Julian Paul. "The group is looking forward to the release of three multi-platform games, Catwoman, Powerdrome and Malice. In addition we are working toward signing new development contract with some of the world's major publishers facilitating the re-use of our multi platform game engines. We look forward to updating the market on our progress."