3rd parties that shunned DC, well Karma strikes again

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!

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 ]

[Pikahobbes]

Sega is the harbinger of doom for 3rd Party Companies. Support them or go to CHAPTER 11!!!!

Maybe now they'll make DC2.

-Hobbes

"C'mon, Dance for me"-Gilder

Whoa.

EA's king of the world. I didn't read their earnings report, but they were up $3+ in after hours, so it must've been good. Square lost money on its movie. Konami didn't take a loss, just less of a profit, realizing that Yu-Gi-Oh Plaid might not be the best bet. Most of Capcom's success lately came from PSX/2, and they cited DC as the reason for weakness in their latest annual report.

Companies who shunned the DC were better off in some respects. They didn't have to go through two transition periods, and it's transition periods that are the toughest. However, they also passed up easy money for about a year, assuming they would've played the DC right, that is (anyone who didn't dump the DC after a year didn't play it right).

[pzirm]

Konami is going down the crapper. I find that less and less people are caring about them.

^ I think it's payback for screwing up Contra with those horrid games on PSX. Oh, and when they bashed Treasure back in the day didn't help either.

MGS2 = top selling game, which explains the boost in revenues.

We've been through the Square lost money thingy in the past, as I've said yeah they did lose that money from the movie, but they could have just as well cushioned that loss through DC money which was a sure thing all things considered.

Well good for EA, they have so many things going for them, they have to have a better earnings by now. But haven't people realized Sega's 2k sports counterpart of EA's are just much better, at least imo.

Gotta agree with Pzerm, more ppl are less inclined to care about Konami nowadays, after Silent Hill and MGS, what do they have to deserve any more attention. Plus the fact they are shunning Gamecube, doesn't help make the situation way better. However, its been confirmed that MGS2 for Xbox is official, do ppl still care? Perhaps [img]smile.gif[/img]

Yah, Treasure rulez! It was a good thing they're independent now, they jsut make awesome games, game after game. Makes me wish they finally change their policy(no sequels) and make a rare collaboration with Konami on another Contra game.

A Square game within the first year of release? Maybe something like Bouncer or Driving Emotion.

Turns out the EA earnings news was record revenues.

Quality is irrelevant to who outsells who.

Not seeing how shunning Cube would hurt.

MGSX and GTAX were confirmed long ago... people just didn't want to believe it.

[pzirm]

Konami developing some game for Cube..don't know what it is, but I don't care either.

Konami's in decline. Ignoring the 2nd most popular platform (in addition to other insane business decisions) isn't helping.

MGSX sounds like MGS. Not MGS 2.

Microsoft probably paid them. I doubt those companies ported them over on their own.

Hhhmm BOuncer maybe, since it was Square and not many beat 'em up games for DC. But with a Square support, I meant big name games not crappy ones.

True quality is irrelevant, more than speaks for itself when looking at game sales. Market is too damn ignorant. Maybe time will tell, Sega Sports has to kill the EA counterparts sometime.

Well Konami not supporting is hurting its reputation not to mention lost revenue? CAPCOM sure as heck got a good reputation for supporting DC and now that they are doing the same thing for GC, things are looking up for CAPCOM which is increasing its market share as mentioned in the article by 9%.

Its been confirmed that MGSX would be MGS2 with more features.

Konami's developing a bunch of exclusives for Cube. (Disney sports games.)

Konami actually had 31.5% better sales, not that anybody read the article. They're just working on profit margin issues stemming from high cost games (MGS2) as compared with churn one out every month games (Yu-Gi-Oh), not to mention that transition costs and console costs are much higher than developing for a system that's been on the market for 13 years and portables.

Heard that one like a year ago.

Take Two's been active on Box. It's Cube where they're skeptical, mostly because they don't want to release a Borrow Your Neighbor's Auto.

You can't do an FF in a timely enough fashion for it to have been worthwhile.

The Disney deal is a great fit for Cube. Tough to lose money on that.

Capcom's reputation stems from years of milking Street Fighter and Mega Man, followed by Resident Evil on the PSX.

[ May 11, 2002, 01:00 AM: Message edited by: I'm not getting Eminem's new CD ]

[Pikahobbes]

Originally posted by A Winner Is You:
^ I think it's payback for screwing up Contra with those horrid games on PSX. Oh, and when they bashed Treasure back in the day didn't help either.

Mmmmmmm....Contra Hard Corps....Gunstar Heroes...AHHHH, Stretch Panic!!!! SHOOT IT, SHOOT IT!!!!

-Hobbes
Gunslinger

"C'mon, Dance for me"-Gilder

[ May 11, 2002, 01:59 PM: Message edited by: Gilder the Blue Rogue ]