Strong Demand for Holiday Game Releases Drove Improved Q1 for Majesco

Majesco Entertainment reported improved results for Q1 ended Jan. 31 that it said were driven by strong demand for its holiday season releases. Profit grew to $6.8 million, or 18 cents per share, from $3.8 million, 10 cents, in Q1 last year. Revenue grew 66 percent to $48.5 million.

It was one of the company’s “best holiday quarters” ever, said CEO Jesse Sutton. Zumba Fitness “has proven to be an extremely successful title, and is quickly establishing itself as another key franchise alongside” Cooking Mama, he said. Zumba Fitness became one of Majesco’s “fastest-selling titles, having sold over 1 million units in its first four months,” it said. “Momentum continued past the holiday season,” too, as the game was the industry’s No. 2-selling title on the Wii in January and No. 5 overall, it said, citing NPD data.

Majesco was also “pleased” with the demand for its new releases Babysitting Mama and Crafting Mama, which Sutton said “sold well at retail and show that the Cooking Mama brand is alive and well.” Babysitting Mama shipped in early November, bundled with a plush baby doll that the player tucks the Wii Remote into to interact with the doll and game at the same time.

Majesco also “made significant progress” with its digital initiative, Sutton said. It “made our first real entry into the social games business” with Cooking Mama Friends’ Cafe on Facebook, and that title attracted more than 750,000 active users “despite a very limited marketing campaign to date” in its beta mode, he said. The company is already “preparing to launch our next Facebook game this spring,” Parking Wars 2, based on the A&E TV series of the same name in Q4, he said. Majesco will launch “at least 3 Facebook games this fiscal year, and have an experienced team working on optimizing the gameplay to improve the overall experience and monetization,” he said.

Q1 gross margin jumped to 40.5 percent from 29.8 percent due to “the higher price points” of its Zumba Fitness SKUs compared to its Wii and DS titles in Q1 last year, Majesco said.

Majesco expects to report revenue of $100 million-$110 million for the fiscal year, up from its previous forecast of $85 million-$90 million, it said. It expects to report earnings per share of 20-25 cents for the year, up from 6-10 cents. It expects to release 19 SKUs in 2011, including six for the 3DS, four on Kinect for the Xbox 360, three for the PS3, two for the Wii and four for the DS, it said. An earnings call was scheduled to be held after our deadline.