Strong Majesco Support For New Microsoft, Nintendo, Sony Systems

Majesco Entertainment will support the new Kinect for Xbox 360, Nintendo 3DS handheld system and PlayStation Move for the PS3 with games, Majesco CEO Jesse Sutton said in a Monday earnings call. Meanwhile, it said revenue for Q2 ended April 30 tumbled 47 percent from Q2 2009 to $10.9 million. Its loss narrowed only slightly, to $1.6 million, 4 cents per share, from $1.7 million, 6 cents.

"We are very excited about these new initiatives” from Microsoft, Nintendo and Sony, “and we feel they reflect the common sense within the industry, consistent with our strategic focus that the great opportunity ahead continues to be offering quality entertainment experiences to the growing demographics in gaming,” Sutton said. “A common and general theme is that mom, kids and families are all playing more games, more than ever. We believe this is an affirmation of the general strategy we have pursued, and that despite the fluctuations of the economy felt in all sectors, great software will gain great traction,” he said. “The future looks very bright in the interactive entertainment industry,” he said.

Majesco will release versions of its coming Zumba Fitness game, developed by Pipeworks Software, that will support the Kinect and PlayStation Move motion control systems. It will be “one of only 15 launch titles” for Kinect, Sutton said. Majesco “has several products that will be included in” the third-party 3DS support announcement that was planned for Tuesday by Nintendo, he said.

Sutton said Majesco’s “strategy is that we are platform agnostic and demographic focused; wherever our demographic migrates to, you will see us creating products on those platforms.” Majesco will usually “wait for those platforms to mature a little before we jump onto those platforms, [so] that we make the most of our entry.” But he said, “Without question the platforms that you will hear Majesco announce products for in the near future will be the Facebook social gaming platform as well as the iPhone and iPad. I think the iPhone and iPad still have to mature a little bit.” But “it’s an incredibly fast-growing platform, and we intend on taking advantage of … that and Facebook and other social networks that may come up,” he said. Coming iPhone games from Majesco include a version of its Gardening Mama. Another extension of Majesco’s popular Cooking Mama franchise, meanwhile, will be Babysitting Mama for the Wii, which will ship this holiday season with a plush baby doll that players will place the console’s controller into to interact with the game and doll at the same time, the company said.

Although Majesco’s revenue fell from last year, Chief Financial Officer John Gross said the result was “consistent with internal expectations.” Some of the publisher’s “strongest titles are in the second half of the year, including the recently released Tetris Party Deluxe, which is off to a good start,” he said. The publisher’s holiday line-up also “includes two Mama titles for the first time ever, and we already have in place some strong holiday distribution deals,” he said. Majesco will also, “for the first time … be launching two new Mama brand extensions this holiday,” Crafting Mama for the DS and Babysitting Mama for the Wii, he said.

The revenue decline from 2009 was “primarily due to the strength” of Majesco’s first Jillian Michaels fitness title, which Gross said “continued to sell strongly in the second quarter of last year, and also, the second quarter included the introduction of Gardening Mama last year.” Majesco “had no such strong releases in” Q2 this year, he said. Q2 Wii revenue tumbled 75 percent from Q2 2009 to $2.6 million, “the majority of which was due to the performance of” Jillian Michaels Fitness Ultimatum last year, he said. DS revenue fell 14 percent from Q2 last year to $8 million, “due entirely to last year’s introduction of Gardening Mama,” he said. “The lack of a new title in this quarter, as well as weakness in the Wii SKUs contributed to a decline in sales for the Mama line,” he said.

The U.S. accounted for more than 95 percent of Majesco’s Q2 revenue, flat with 2009, Gross said. Despite seeing “a drop-off of product revenue from last quarter, we remain confident in our remaining 2010 product releases and continue to be on track to reach our revenue goal of $80 million and profitability of 5 cents per share” for this fiscal year, he said.

Majesco’s Q2 selling and marketing expenses fell $1.7 million, or 53 percent, in Q2, “driven by a substantial cutback in media advertising and the substantial reductions in the costs associated with our European business,” Gross said. Q1 job cuts “benefited the year-over-year comparisons throughout the organization,” he also said.

Majesco is also continuing “to work vigorously to maintain a NASDAQ listing,” Gross said. “As of now, we believe we will qualify for an additional grace period of about 180 days, following August 30, in which we can comply with the $1 bid price, and we would continue to pursue that extension to the fullest that’s available,” he said.