Midway Reports Losses

A year after Midway Games appeared to be crawling out of their tradition of losses, Midway posted fourth quarter losses of $37.8 million for the quarter ending December 31, 2005, compared to $17.6 million of income the year prior. Net revenue of $69.8 million was recorded for the quarter, down from 2004 fourth quarter results of $77.5 million. Blitz: The League appeared to help the company, as it ranked as a Top 5 Xbox title in October and November and a Top 10 PlayStation 2 title in November.

David F. Zucker, president and chief executive officer, commented, “Midway’s fourth quarter results reflect the challenging industry environment that has affected nearly all software publishers at this point in the console transition. Nevertheless, Blitz: The League achieved breakout success for us, and our first Cartoon Network release, Ed, Edd n Eddy, performed well in the quarter.â€?

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Mr. Zucker continued, “Operationally, we continued to invest significant resources in our internal product development efforts and we believe we are establishing a best-in-class next generation product development platform across all of our internal studios. We expect our investments in these areas in the fourth quarter and throughout last year to benefit our future next generation releases.�

For the year ended December 31, 2005, net revenues were $150.1 million, down from $161.6 million for the year ended December 31, 2004. Losses for the year ended December 31, 2005 amounted to $112.8 million, up considerably from the $24.7 million loss for the year ended December 31, 2004. Looking ahead, for the year ending December 31, 2006, Midway expects revenues to grow to $155 million with a reduction in net loss to approximately $66 million. For the first quarter ending March 31, 2006, Midway expects net revenues of approximately $13 million, with a net loss of approximately $22 million.

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