Canadian-based Hip Interactive Corp., large Canadian game distributors, makers of game peripherals, and now also game publisher, announced its earnings results for the third quarter of its 2005 financial year, which falls from October to December. The company's holiday quarter was below the same period in 2004; as with some other companies, Hip Interactive cited the console hardware shortage as a reason for its overall sales declining by 20.3% and its gross margin decreasing to 7.0% from 9.2% in 2004. Overall sales for the period were $142.5 million USD. In specific departments, the Distribution section had sales of $121.3 million, down $30 million from 2004. Margins went down to 4.6% from 7.8%. The Hip Gear accessories department and Hip Games publishing departments, however, saw upswings with sales of $11.3 million and $8.1 million respectively. "Hip's fiscal 2005 third quarter was a disappointment for us," said Arindra Singh, President and CEO of Hip Interactive; however, he continued, "We believe that actions initiated in November and subsequently will have a positive impact on our Distribution Division in coming quarters, although we expect the hardware shortage to take some time for our suppliers to resolve fully." The company also mentioned possibly upcoming strength for its Hip Games publishing division, which will be releasing Blue52-developed stealth action title Stolen on PS2, Xbox and PC, for which Hip is the worldwide publisher. In addition, Hip's The Sims-styled 'tycoon' game Playboy: The Mansion, which released on January 25, 2005, had initial sell-in units of more than twice Hip's breakeven unit levels. Going forward, the company's fiscal 2006 lineup also includes notable titles including Pariah, Fear Factor: Unleashed, City of the Dead, Ghost Wars and World Rugby.