On Monday, video games publisher Southpeak Interactive announced their fiscal earnings for the quarter ended March 31, 2010. Net revenues for the quarter came to $7.5 million, down from $13.5 million in the same period last year, while revenues for the three quarters ending in March came to $34 million down from $39 million last year. Net income for the quarter rose to $192,000 versus a net loss of $692,000 in the same period last year. The company attributed the loss in net revenue to the lack of higher-margin Xbox 360 and PlayStation 3 titles released and sold during the quarter.
Over the course of the quarter, Southpeak released numerous titles: Blood Bowl (PC and Xbox 360), Crime Scene (Nintendo DS), Hotel Giant 2 (PC), Risen (Xbox 360), Prison Break (PS3, Xbox 360 and PC), DJ Star (Nintendo DS), and Miniclip Sushi Go Round (Wii and Nintendo DS). The company’s My Baby franchise reached 1 million units sold in April. The company also resolved litigation with CDV Software Entertainment and a distribution dispute with Pardox Interactive. In addition, Southpeak acquired the rights to publish Stronghold 3, the next title in Firefly Studio’s 5 million selling franchise.
“In conjunction with our previously announced strategy, we limited the number of titles released for the third quarter to better align our activities with the current retail environment and broader gaming industry,” said SouthPeak CEO Melanie Mroz. “While this impacted our sales, we believe this conservative strategy will enable us to more effectively compete among the current market conditions while continuing to maintain tight control of our expenses. We continued to reduce our operating expenses and have maintained a tight rein on our costs, and are delighted to have achieved break-even for the period.”
“In recent months, we have accomplished a great deal. The success of our My Baby franchise continues to attract users and in April we reached record sales exceeding one million units. Our overall catalogue sales remain strong, which speaks to our growing brand appeal and our extensive portfolio of over 60 interactive games. We continue to add to this base by introducing new games and exciting sequels that provide a solid built-in customer base and attract new users. Most recently, we significantly strengthened our already robust line-up with our asset acquisition agreement for FireFly’s Stronghold 3, a franchise that has sold more than five million copies globally. As one of the most respected games in its genre, we expect the introduction of this sequel will bolster our sales through both retail and digital offerings. There remains a significant unrealized opportunity for our catalogue and new games among digital channels, and we are increasing our focus on building our portfolio in this arena to better capitalize on the digital opportunity.”
Post-March, the company released Dementium II for Nintendo DS and 3D Dot Game Heroes for PS3 to decent ratings. “Review scores for our much anticipated sequel Dementium II and 3D Dot Game Heroes have been outstanding and we expect both these games will be among our top contributors in the coming quarters. Initial traction with our titles released during the March quarter has been positive and we are especially encouraged by the enthusiastic reception 3D Dot Game Heroes has received thus far in the U.K,” said Southpeak chairman Terry Phillips.
“We have a terrific pipeline of games and are building excellent relationships with our partners, which gain us access to new titles while keeping in line with our strategy to minimize upfront development expense. We are particularly excited about the new titles released under our agreement with our strategic partner and minority stakeholder Koch Media. During the quarter we introduced three popular titles under this agreement: Risen, Prison Break and DJ Star. Each of these titles has gotten off to a strong start, and we look forward to expanding our relationship with Koch. As the exclusive publishing partner of Koch’s Deep Silver games in North America, we expect to release new titles under this arrangement in future periods. Strategic agreements such as this and our recent acquisition of the rights to develop Stronghold 3, significantly enhance our overall brand and help us to further align with our goals to maximize profit while maintaining a low cost structure,” finished Phillips.
