Video Game Forums - View Single Post - 3rd parties that shunned DC, well Karma strikes again

05-09-2002, 04:33 PM

Its funny how the three companies that shunned Dreamcast three years ago, have travelled the road less travelled and came out with a loss(literally). First there was EA who lost tons of money back in 2000(not exactly ff. EA's sales, but I think they are still not making money the way they used to) then there was Square for shunning DC too, they too have lost money and for 2 straight years now. Remains to be seen for this year. Now Karma strike at Konami! That's what those companies get for putting their eggs on one basket, for not capitalizing on DC's reign for a time and for Sqaure and Konami still refusing to go out and make any big efforts outside PS2. Past decisions that have come to bite them hard on present times, and with competition getting fiercer one can wonder, "what where they thinking?" Good 'ole CAPCOM, still making money!

Quote:

Computer Game Maker Konami Sets Downbeat Forecast
Thu May 9, 6:21 AM ET
By Yuka Obayashi

TOKYO (Reuters) - Japanese computer game software developer Konami Co Ltd said on Thursday its net profit tumbled 37.7 percent in the 12 months to March, battered by a plunge in sales of its high margin "Yu-Gi-Oh!" card game.

The company, known for its "Metal Gear Solid" video game software series, also unveiled downbeat outlook, forecasting a sharp 48 percent slide in group net profit for the year to next March to seven billion yen, worse than most analysts' forecasts.

In 2001/02, consolidated net profit dropped to 13.57 billion yen ($105.3 million) from 21.78 billion a year earlier, in line with its February projection of 13.5 billion -- the same as analysts' consensus estimates compiled by research firm Multex.

"A larger-than-expected dip in card game sales dragged down overall earnings," a company official said, pointing to a 64 percent drop in "Yu-Gi-Oh!" sales in 2001/02 to 19 billion yen.

In 2000/01, Konami's earnings got a spectacular lift from its popular "Yu-Gi-Oh!" trading cards, based on more than 1,000 monster characters and used in a game that was a runaway success with Japanese elementary school children.

Group revenue, however, rose 31.5 percent to 225.58 billion yen in 2001/02, thanks to solid game software revenue on the back of hit "Metal Gear Solid 2" and an infusion from fitness club unit Konami Sports , which it acquired early last year.

Rival game developer Enix Corp also said on Thursday its parent net profit dipped 61 percent to 4.4 billion yen for the year that ended in March as game sales slumped.

DOWNBEAT OUTLOOK

Konami's forecast of a seven billion yen net profit for the current year falls below the Multex consensus projection of 12.98 billion yen.

The company attributed the forecast slide to slower sales of video games and further weakness in its trading game business.

"We expect royalty payments and development costs in video games to rise as we plan to release 122 games, against 105 last year," a senior executive Noriaki Yamaguchi told reporters.

The downbeat forecast comes despite a boom time for game software makers, which are licking their lips over the prospect of higher sales and profits as game consoles infiltrate living rooms worldwide.

Leading the console charge is the PlayStation 2 (news - web sites) by Sony Corp (news - web sites) , followed by the GameCube by Nintendo (news - web sites) Co Ltd and the Xbox (news - web sites) from new entrant Microsoft Corp .

Giving a further disappointment to investors, Konami forecast a dividend of 18 yen per share for the year to next March, down sharply from 54 yen in the previous year.

Prior to the announcement, Konami shares closed up 2.96 percent at 3,480 yen, helped by a 11.04 percent surge in Konami Sports' stock due to its strong profit forecast unveiled on Wednesday.

Konami Co's stock has lost 11 percent of its value so far this year, underperforming peers Sega Corp and Capcom whose shares have risen 15 percent and nine percent respectively.

In a move to boost its share price, Konami, which aims to list on the New York Stock Exchange (news - web sites) in September, said it planned to buy back up to 6.99 percent, or up to 26 billion yen worth, of its outstanding shares.

(Additional reporting by David McMahon)

[ May 09, 2002, 06:17 PM: Message edited by: Jedi Knight JM ]