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Vivendi Games Sees 91% Revenue Boost From Burning Crusade

Media giant Vivendi has announced 49% decrease in profits for H1 2007, but with its Vivendi Games division seeing a 91.9% revenue increase, driven by strong sales of World of Warcraft: The Burning Crusade, also revealing a new profit sharing plan a
Vivendi's games business was the standout in its second-quarter earnings announcement today. While the company saw a 49% decrease in profits year-over-year as its Universal Music subsidiary and SFR mobile operator business lagged, the strong success of World of Warcraft's latest expansion pack, The Burning Crusade, strengthened results. The company saw a 6.4 percent increase in revenues over the previous year to €10.223 billion ($13.97 billion). Its first half earnings before interest, tax and amortization (EBITA) increased 10.6 percent over 2006 to €2.6 billion ($3.55 billion). Specifically, the firm's games business saw a 91.9 percent increase in revenue year-over-year to €119 million ($162.67), as World of Warcraft reached the 9 million subscriber mark. Interestingly, the company's results also noted: "EBITA is also impacted by a non-recurring increase related to Blizzard's profit sharing and talent retention plan, and the seasonal effects of Sierra Entertainment's product releases." Specifics of the new talent retention span were not revealed, other than it being more expensive. “Vivendi demonstrated significant growth in revenues, EBITA, adjusted net income and cash flow generation in the first half of 2007," said Jean-Bernard Lévy, chairman of Vivendi’s management board. "This proves the effectiveness of a strategy focused on developing and investing in the entertainment industry." He continued, "By the end of the year, we expect to exceed the record year we had in 2006 and we confirm our outlook for an adjusted net income above €2.7 billion. The business unit dynamic remains excellent and our long-term objectives are on target.”

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