Net revenues slumped to $14.8 million -- a 41% drop from the same period a year ago. These results missed analyst expectations by a large margin: 4 analysts surveyed by Thomson Financial/First Call expected just a 13 cents per share loss for the quarter.
Executives at the company blamed the poor results by the lack of new titles released during the period. Last year Interplay released 10 new titles in the second quarter and 21 new titles year-to-date, while this year it released only 4 new titles in the second quarter and 7 new titles year-to-date. Additionally, the release of lower-priced PC titles and its PC-based back-catalog business resulted in lower gross profit margins compared to last year.
"We have suffered some painful and disappointing delays on the release of major next generation console titles, and our limited resources have forced us to focus only on high-end games going forward, so we had to discontinue or suspend selected projects and take certain charges to operating results. We still expect to have an excellent line-up of games in our future release schedule that includes Giants and Baldur's Gate Dark Alliance on Playstation 2 scheduled to release in fourth quarter of this year, with the potential for multiple platform releases of Galleon, Hunter, RLH, Neverwinter Nights and Matrix, all of which are primarily focused on next generation consoles and are scheduled for release next year," said Brian Fargo, chairman and CEO of Interplay.
Last week French game publisher Titus said it would take control of Interplay in September, and increased its ownership of the company to 51.5% via an exchange of convertible bonds.