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Losses Deepen For Peripheral Maker Mad Catz

Officials from video game peripheral maker Mad Catz have announced the company’s first quarter results for the three months ended June 30th. During this period net sales ...
Officials from video game peripheral maker Mad Catz have announced the company’s first quarter results for the three months ended June 30th. During this period net sales fell 12 percent from the same period last year, to $14.8 million, while the company reported a net loss of $2.1 million, compared to a net loss of $0.2 million a year ago. The downturn of the current console hardware cycle was primarily blamed by Mad Catz for the increased losses, together with the traditionally quiet time of year for hardware sales. In addition, Darren Richardson, President and CEO of Mad Catz Interactive, commented: "Lower net sales, along with provisions for returns, allowances and inventory write downs, had the effect of reducing the Company's operating leverage, as select price protection was required, resulting in a decline in the gross profit margin." There was some good news for the company, though, with European sales rising by 179 percent to $3.1 million, and new licensing agreements for the Batman Begins and Fantastic 4 movies, as well as a successful range of NFL controllers – with NBA and MLB versions to come. In addition, the company is expanding further into joint game and peripheral distribution, following the release of the GameCube dance game/mat MC Groovz Dance Craze bundle. New agreements signed include a North American Pump It Up distribution agreement with Mastiff, including a Mad Catz-constructed dance mat, and a European Real World Golf distribution agreement with In2Games including a mini golf club controller. Importantly, the company also became the first Xbox 360 accessories licensee, as referenced in a previous story. Commenting overall on the results, CEO Richardson stated: "Mad Catz' fiscal first quarter, historically the slowest period of our fiscal year, reflected soft demand in the North American market for video game hardware, software and accessories. In the near-term, we see a continuation of some of the slow market trends that we faced in the first quarter. While it has been a challenging quarter, we remain committed to our strategic direction and initiatives, as outlined over the last year, and continue to believe that the long term outlook for the industry is positive."

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