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Marvel Sees Profit Drop, Reveals $50 Million Game Licensing Deal

Comic book and "character based-entertainment and licensing" company Marvel, which licenses a number of its properties such as Spider-Man for the video game market...
Comic book and "character based-entertainment and licensing" company Marvel, which licenses a number of its properties such as Spider-Man for the video game market, reported much-reduced revenue and profit for its 2005 third financial quarter, and further reduced financial predictions, commenting that "...our 2006 outlook reflects a difficult year for both toys and licensing." However, the company's results also revealed that "Marvel is revising its 2005 financial guidance to reflect the contribution of a landmark, long-term license agreement in the video game category." This deal, which includes licensing revenues of $50 million, to be recorded in the fourth quarter, is with an unnamed company, but Activision, publisher of the Spider-Man and X-Men Legends titles, is the most likely signatory, given its close relationship with Marvel. However, Marvel's list of games based on its licenses reveals that Electronic Arts (Marvel Nemesis: Rise Of The Imperfects), THQ (The Punisher), Vivendi Universal Games (The Hulk: Ultimate Destruction) and Majesco (Ghost Rider) have also licensed Marvel properties recently, so the specific game long-time licensor could conceivably come from those firms. Marvel's specific third-quarter results saw profit down 29% to $23.4 million, and revenue down to $81.1 million from $135.2 million, and this, combined with the gloomy 2006 outlook, tanked the New York Stock Exchange-traded Marvel shares, with Marvel stock down over 20% at $14.29 in afternoon trading.

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