Acclaim president sees signs for a recovery
Thursday May 15, 7:00 pm ET
By Ben Berkowitz
LOS ANGELES, May 15 (Reuters) - Video game publisher Acclaim Entertainment Inc. (NasdaqSC:AKLM - News), which has reeled in the past year from a string of disappointing releases, sees signs for a recovery thanks to recent cost reductions and its aggressive game pricing, the company's president said on Wednesday.
"The signs are there for a recovery," Rod Cousens told Reuters at the annual Electronic Entertainment Expo.
"I believe we've got our costs of development and return on investment model in line," said Cousens who became president and chief operating officer after his predecessor Edmond Sanctis left the company.
At last year's E3, Acclaim was riding on high expectations and financial forecasts, based on what it thought would be the strength of games like "Turok," "Aggressive Inline, "Vexx," and "BMX XXX."
But those games fell far short of forecasts, causing Acclaim to sharply lower its guidance and revise its operating plans. Its stock price has suffered as a result, falling 85 percent in the last 52 weeks.
One of Acclaim's new strategies is to try reduced pricing, to $39 and even $29 in some cases, on console games. The majority of top game titles command $49 prices.
"I think we're being honest with ourselves," he said, noting that the prices would hopefully make the company's games more attractive to the mass market.
The company's major game release this year is "Alias," a game based on the ABC drama and featuring voice work by the cast of the show. The company is also banking on the return of the 3-on-3 basketball "NBA Jam" franchise.
"First of all, we have to clean up the company and I think we'll be demonstrating that very shortly," Cousens said. "I think Acclaim's got leaner and meaner."
Acclaim's stock, which closed at 66 cents a share on Thursday, is facing the prospect of being delisted from the Nasdaq.
Acclaim said in January it would cut its global administrative head count by about 35 percent to reduce expenses.
In April the company entered into an unusual financing transaction, where its co-chairmen had to post a $2 million deposit of their own money in order to secure the company's credit line.
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