Games publisher Eidos saw its shares plummet by another 25% today, after admitting that sales of its latest Lara Croft game have come in below expectations. 'Tomb Raider: Underworld' has apparently failed to entice credit-crunched gamers, particularly in the US where retailers have been reluctant to stock up on expensive new titles (and discounting the ones they do stock to try and get shoppers through the doors). All in all, Eidos has shifted just 1.5m copies, forcing it to lower its sales forecasts and leaving it in danger of missing its profit target. If it does, not even Lara will be able to save the company from going cap-in-hand to its banks for a new deal...
It’s been a horrible 12 months for Eidos, which has now lost more than 90% of its value amid plunging videogame sales. Today’s news only made matters worse: it’s now predicting full-year sales of £160-180m (down from £180-200m) – and with margins also being squeezed, there’s a good chance it may not be able to fulfil its profit targets for June. Although it still claims to have some breathing space, it admitted this may necessitate a little chat with its lenders before too long.
New Eidos CEO Phil Rogers, who was brought in to replace Jane Kavanagh a year ago as part of a management shake-up, says he’s trying to focus on ‘high quality titles that will deliver long-term franchise value’. And apparently he has high hopes for this year’s new Batman game, developed in conjunction with Warner Bros (which has built a 20% stake in Eidos, leading to rumours of a takeover bid) and DC Comics.
But the fact remains that Lara Croft – for so long the shining star of the Eidos stable – is looking increasingly like yesterday’s news. After all, it’s not as though the gaming industry as a whole has been struggling: figures released by an industry trade body earlier this week suggested sales topped £4bn in 2008, thanks largely to the huge success of Nintendo’s Wii and DS consoles.
This might please those who remain unconvinced by Lara’s pneumatic charms. But we reckon it would be a shame if Eidos – the UK’s biggest independent games developer – ends up being absorbed into a bigger global media empire like Warner Bros. Let’s hope its techies can come up with the new Lara before too long...
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