but dont worry any such action is already factored in to ERTSs share price. Notice how they are downplaying their exposure to PS2 for the Christmas season. Maybe ERTS may want to write off some of their net investment also. TTWO and EIDSY have both jumped that ship.
Dont worry guys ERTSs WCW games are selling like hotcakes. Should just do bad enough to offset any profits from at least a couple of their PS2 titles.
Top Financial News
11/28 05:22 Eidos 2nd-Qtr Loss Widens on Charge for Unsold Games (Update2) By Christine Harper
London, Nov. 28 (Bloomberg) -- Eidos Plc, the U.K.'s largest video-games maker, said fiscal second-quarter loss widened as Sony Corp. delayed the introduction of its PlayStation 2 console and the company wrote off the value of unsold games and an Internet investment. Its shares fell as much as 11 percent.
The net loss at the creator of game heroine Lara Croft widened to 60.2 million pounds ($89.1 million), or 58.1 pence a share, in the three months ended Sept. 30 from 12.8 million pounds, or 13.3 pence, in the same period last year. Sales fell 25 percent to 20.6 million pounds.
The company's sales, along with rivals such as Electronic Arts Inc., have fallen as customers waited for the new PlayStation. Eidos has cut costs and lowered production after some of the games produced last year weren't sold, forcing the company to write them off as a loss.
``Obviously the big problem with the results, the worry, is the exceptional item that they've taken,'' said Julian Morse, an analyst at Beeson Gregory who rates the shares ``buy.'' ``Apart from that I think it's actually quite a good statement.''
Eidos shares, which had already fallen 82 percent this year, dropped as much as 22 pence to 177p.
During the quarter, the company wrote off 16.9 million pounds of unsold games. It also wrote off its 12.6 percent stake in Internet site Express.com, which it bought last year for $55 million. The company spent another 900,000 pounds in fees related to unsuccessful talks to be acquired earlier this year.
Excluding these charges, the company said its net loss narrowed to 6.1 million pounds from 16.8 million.
``Our fortunes as a third-party publisher will be based around the success of the PlayStation 2,'' said McGarvey, who replaced Charles Cornwall this month. Sony ``expects to be back on track in the first calendar quarter of next year.''
Still, analysts have warned that shipments of PlayStation 2 are lagging expectations because of problems making graphic chips. The console was introduced last month in the U.S. and this month in Europe. In the U.K., the entire 165,000-unit pre-Christmas allocation of consoles was sold out in advance.
Growth to Come
Morse of Beeson Gregory said he expects sales of video games to grow again next year once more PlayStation 2 consoles become available and Microsoft Corp. and Nintendo Co. introduce competing products.
``There's no doubt about it that the market next year is going to be huge and in the next three years there's going to be massive growth,'' Morse said.
McGarvey said the company has limited its exposure to PlayStation 2 during the holiday period and instead will mostly sell games for the original PlayStation, personal computers, and other consoles such as Sega Corp.'s Dreamcast.
``There are a number of negatives and a number of positives'' in the results, said Kean Marden, an analyst at UBS Warburg who rates the shares ``hold.'' ``On an underlying basis the numbers look a touch better than I was expecting, but you've also got exceptionals which are extremely large and no doubt that will scare a number of private investors when they read it.''
Yeah, ERTS screwed the pooch when they got the WCW liscence. I'm also looking to go short on ERTS but still waiting to dump my shares before I do so. I missed that nice opportunity we had yesterday, so hopefully we'll see another NAS pop so I can get out at around 45-48. I might get back in once ERTS products for all next-gen systems start being unveiled.
nsthil, you almost make it sound like you saw this PS2 shortage coming!
Maybe not, but with new product launches you frequently have problems with delays and shortages. My opinion was based on fact that ERTS shares were priced for perfection. Regardless after the shortage was first announced I as well as others mentioned that SONY will apparently come up short with Europe launch as well as probably end up with problems meetin the schedule they have layed out but ERTSs stock price recovered back to above $50 while insiders continued to sell. That was a gift to the longs here and also for the shorts.
PC, N64 and PS1 sales for ERTS will be way off from last year. C&C for and other titles for PC will fall far short trying to make up for SIMS from last year. Sports titles for PC for this year will be very weak sellers. Not being stressed much by ERTS this year and there is enough of the older games there at cheaper price points. WCW for PS1 and N64 will bomb. They have no DC games and weak showing in Gameboy.
ERTS will lay a big fat rotten egg sometime in the next few months.