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Ziff Davis Announces Reduced Overall Profits

Officials from game-related media company Ziff Davis Holdings, parent company of Ziff Davis Media, have revealed details of the company’s second quarter financial results...
Officials from game-related media company Ziff Davis Holdings, parent company of Ziff Davis Media, have revealed details of the company’s second quarter financial results, ending June 30th. During this period the company reported a 12 percent decrease in revenues compared to the same quarter the previous year, to $45.3 million, and a 67% decrease in profits to $3.1 million. The company has three main divisions: the Consumer Tech Group, the Enterprise Group and the Game Group. The latter is comprised of three magazines (Electronic Gaming Monthly, Computer Gaming World and Official U.S. PlayStation Magazine) and website 1UP.com. Revenue for the Game Group for the second quarter was $9.0 million, down 17 percent on the same time last year. A major portion of the decrease, $0.8 million, related to the discontinuation of GMR magazine and what the company oddly described as "a reduction in the frequency" of Xbox Nation magazine, due to what Ziff Davis suggests is softness in video game advertising before the launch of the next generation consoles. Magazine sales were also down generally, particularly Official U.S. PlayStation Magazine, also due to the ending of the current console cycle, according to the company. Overall, the Game Group had a loss of $1.2 million for the quarter. "Our second quarter performance is reflective of a trend we have seen several times over the last few years, where print advertising and certain other discretionary promotional spending is trimmed by our customers in the face of uncertainty in their markets," said Robert F. Callahan, chairman & CEO. "Fortunately, many new areas of our business, particularly our online and event products, are recipients of increased spending activity, which is rapidly changing and diversifying our business model. As a result, we continue to invest and expand aggressively in these areas, which expenditures negatively impact earnings in the short-term."

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