Copyright 2002 / The Financial Times

[ March 19th 2002 ]

UK videogames developer Eidos Interactive has said delays effecting titles designed for the recently launched Xbox games console, including Championship Manager and Blood Omen, had forced the company to lower its sales target for the second time in three months, the Financial Times reports today.

Shares in Eidos, which also publishers the Tomb Raider videogame series featuring British aristocrat Lara Croft, were down 5-1/2p, or 4 per cent, at 129-3/4p following the companies announcement. The delays come at a critical time for Eidos, as it competes for the lucrative contracts to develop games for the next-generation of consoles, such as Microsoft's Xbox which launched in Europe last week.

Analysts said that while the warning was not a surprise it was disappointing that the company had not stopped the slippage of launch dates that has plagued it in recent years. "This again raises serious questions about management's ability to deliver on their promises," said Steve Liechti, analyst at Merrill Lynch. "The only reason you buy or sell Eidos shares is either for Lara Croft, or because you think it is going to be taken over and this doesn't make that any less likely," he said.

Eidos said sales from six games it launched since December, including Salt Lake 2002 for Sony's PlayStation2 and Mad Dash Racing for the Xbox, had been broadly in line with expectations. However, it said that four games scheduled for launch in March, which also included Hitman 2 for PCs and Deus Ex for PS2 in Europe, would not be released until after the end of its financial year on March 31. Consequently, it said full-year sales would be 120m, down from its December forecast of 135m.

The impact of the revenue shortfall would be partially offset by ongoing cost-cutting efforts, Eidos said. Gross margins would be in line with previous expectations. In December, Eidos blamed disappointing sales of Who wants to be a Millionaire? after downgrading full-year sales forecasts. The company has also been hit by strong competition from games such as Harry Potter, which has dominated sales charts since its mid-November launch.

The company said it hoped to gain more breathing room next year by switching its financial calendar to end on June 30, as the summer months are traditionally a more quiet time for games developers.Eidos said it was still planning to launch five new titles before the end of March, including Blood Omen for the PS2 and Xbox in the US, and Deus Ex for the PS2 in the US.

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