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SouthPeak Sees $5.8 Million Loss, My Baby Dispute Ongoing While CDV Suit Resolved

SouthPeak closes a "challenging" fiscal 2010 with a $5.8 million loss and sales down, but focuses on progress it's made in reducing costs and resolving numerous legal disputes around its products and business practices.

Leigh Alexander, Contributor

October 14, 2010

2 Min Read

Two Worlds and My Baby publisher SouthPeak said it had a "challenging" year, but as it closes its fiscal 2010 with a $5.8 million loss and sales down, the company's focusing on continued cost reductions. SouthPeak reported sales of $40.3 million for the year ending June 30th, versus $47.3 million in 2009. It's touting a 32 percent reduction in its operating expenses to $16.1 million, and points out that it's also issued senior convertible notes to secure itself $7.5 million in capital. In July of this year, the company also gained a new $10 million credit line. "While our top line was impacted by the volatile retail environment in fiscal 2010, based on our strategy of releasing fewer next generation titles while implementing strict expense control, we demonstrated significant year-over-year improvement to our bottom line," said CEO Melanie Mroz. The company released 29 games during the period, and according to Mroz most of the revenue came from Section 8, My Baby Girl & First Steps, and Horrid Henry, as well as from its distribution partnership with Paradox. This year the company also sparred with Paradox on distribution and resolved the dispute, and it's fielding a lawsuit around royalties and breach of contract allegations from Section 8 creators TimeGate Studios. The publisher also revealed that it raised $2 million more through an agreement with Wells Fargo bank, and notably, SouthPeak also says it resolved its long-standing and complex legal dispute with German publisher CDV. The company didn't describe the circumstances under which it settled the dispute. SouthPeak continues to have issues around the My Baby brand, however. When Majesco said it would publish the Nobilis-developed My Baby 3 & Friends, SouthPeak sued Majesco; Nobilis has said it went to another publisher due to alleged non-payment from SouthPeak. The publisher asserts it is the rightful owner of the My Baby IP, but says it won't sell My Baby First Steps or further units of My Baby Girl until the issue is resolved.

About the Author(s)

Leigh Alexander


Leigh Alexander is Editor At Large for Gamasutra and the site's former News Director. Her work has appeared in the Los Angeles Times, Variety, Slate, Paste, Kill Screen, GamePro and numerous other publications. She also blogs regularly about gaming and internet culture at her Sexy Videogameland site. [NOTE: Edited 10/02/2014, this feature-linked bio was outdated.]

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