Eidos reverses profit warning
Despite rumblings from the Core
Games publisher Eidos has said that the problems it had getting Tomb Raider: Angel of Darkness out before the end of its previous financial year won't affect the company's performance after all.
This after making such a song and dance over the fact that it would. But then the news does appear to be being used to mask tough action being taken at the company's Tomb Raider subsidiary, Core Design.
On 27 June, the company issued a profit warning. "While some units may ship within the current financial year [ending 30 June], up to one million units will ship in July, the first month of the next financial year," it said, and added: "This has led the Board to significantly reduce its expectations for profit before tax for the financial year."
Not any longer. Today, Eidos said: "It will now meet the original market expectation for operating profit pre-goodwill for the financial year to 30 June 2003 that prevailed prior to its announcement of 27 June."
So that's all right then? Well, not necessarily. The key phrase to note is 'pre-goodwill', so accounting for that may take the company's final profit below where it might have been had the Tomb Raider release gone to plan.
In the end, says Eidos, only 500,000 Tomb Raider units failed to ship ahead of the 30 June deadline, reducing the hit the company was going to have to take on FY2003 profits. It also says that "strong sell through of products shipped in the last quarter and increased license activity" played a part in covering for the lost Tomb Raider sales.
Eidos will report its FY2003 results on 4 September. The final figures will also be boosted by a £11.4 million ($18.52 million) tax repayment courtesy of the Inland Revenue. That will lead to a "significant increase in net profit", Eidos said.
While that's good news for Eidos shareholders, its staff at Core Design are unlikely to be too happy. Following the Tomb Raider release debacle, Eidos Development Director Jeremy Heath-Smith resigned from the company, and relinquished his role as Core Design Managing Director.
Core Design, a wholly owned Eidos subsidiary, developed the Tomb Raider series in the first place. Now it has had responsibility for the games taken away from it - Eidos will "transfer development of the franchise to its Crystal Dynamics studio in the US".
After five games - the most recent widely criticised as poor successors to the first ones in the series - Core is probably sick of the whole franchise and glad to see the back of it. But the Eidos' boards ire doesn't end there.
Following a "review of the Tomb Raider franchise and the studio operations of Core Design", Eidos will "now be evaluating the Core Design studio's on-going direction and contribution as part of the Group's overall development capabilities". The sounds suspiciously like a 'heads will roll' statement, though whether to appease shareholders or to address real problems at Core, we can't say. ®
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