If you happen to own Midway stock, now would be a good time to sell it. In fact, about a year ago probably would have been the best time. Despite a huge loss in 2006, Midway could not course correct in 2007 and bled another $97.4 million. Things do not look good for the house that Mortal Kombat built.

Things aren’t going to be getting any better anytime soon, either. Midway expects another loss for the first quarter of 2008. Yes, this is starting to get into Atari and Sega territory. But, despite all the doom and gloom, Midway is trying to put a positive spin on things. David F. Zucker, president and CEO, said of the future of the company (more…)

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The dread of many gamers is the eventual arrival in mass of in-game advertising. They’re about to get a lot more of it if one analyst prediction is correct, with expected in-game advertising spending to double in the next five years. While product placement is nothing new in games (you can find it in many NES era titles and earlier), the idea of served ads appearing in games is relatively new.

eMarketer predicts that in-game advertising will rise from $295 million in 2007 to $650 million in 2012. They base this upon, among other things, the continuing increase in revenue in hardware and software in the game industry. The interesting part is that this may actually be an under estimate of the increase gamers will see. (more…)

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Sega is one of the great tragedies of gaming. Just a console generation ago the Dreamcast was flying high with high quality arcade ports and original titles. Now, just one generation later we see what may be the end to one of the great names in gaming as they are hit with 400 layoffs.

The downfall began with the death of the Dreamcast. At the same time, Sega announced their move full-time to third party developer. While many assumed this would turn them into a powerhouse on the level of Electronic Arts, it instead quickly ended them up in the red and in a merger with Sammy. That new combined company has done little to rescue Sega’s profits and may have contributed to the decline of their game quality. The Sega we see today is sadly a mere shell of its former glory. (more…)

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Sony’s gaming division has announced that last quarter it turned a profit, after several of losses. In fairness, many of those quarters were dragged down by the research and development costs involved with the PS3. Even more to the point, didn’t the Xbox division of Microsoft just recently turn a profit? So, what’s the news about Sony?

Of course Sony lost money with the introduction of a new console. Most console developers do. In fact, many game developers actually lose money or have substantially cut profits with the introduction of a new console as sales slow and research costs go into developing next generation game engines. This isn’t anything new, and in fact what has been new is Nintendo’s recent profit bonanza with the introduction of their sales crazy Wii. Traditionally game companies take substantial losses on the early years of a console’s life in order to get the hardware to market and then reap the profits from game licensing, which partly explains why Nintendo was so angry back in the 8-bit days at companies for bypassing their licensing. (more…)

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