Midway hits Q1 expectations, expects further losses through 2005

Publisher Midway has announced its financial results for the first quarter of 2005, revealing a net loss of $15.9 million on revenues of $13.8 million - broadly in line with analyst expectations, but representing a major decline from last year's figures.

The firm's revenue figure was down by some 31 per cent over the same quarter last year, while the net loss figure was up by over $1 million - but this was to be expected, given that the firm's only releases in the quarter were the budget priced NARC on PS2 and Xbox, and Mortal Kombat: Deception on the Cube.

The company continues to work on improving its product portfolio, and is hoping to realise revenues of around $225 million for the full year - an increase of around 40 per cent on last year - driven largely by a strong line-up of franchise titles in the second half of the calendar.

Mortal Kombat: Shaolin Monks, The Suffering: Ties That Bind, Gauntlet: Seven Sorrows and Edd 'n Eddy: The Mis-Edventures are all noted as key titles in the second half, along with LA Rush and Blitz: The League - but a notable no-show is Fear & Respect, a crime title with director John Singleton attached to its production, which has been pushed back to 2006.

Also due in 2006 is Epic Games' Unreal Tournament 2007 on PC, the hugely impressive first screenshots of which were released earlier this week.

Despite the increased revenues which Midway is expecting for the full year, the company is also predicting an increased loss - and has actually raised its loss projections from $38 million to $47 million for the full year.

Analysts remain cautiously optimistic about Midway's prospects in the medium term, with Wedbush Morgan Securities' Michael Pachter, who has reiterated a Hold rating on the firm's stock, saying that the outlook for the firm "is improving due to better quality games."

"We believe that the company is building the infrastructure necessary to support significantly higher revenues," he explained in a note on the earnings statement, "and expect this investment to pay dividends in 2007, if not earlier."