I'm glad my comments have been of use and thank you for your compliment.
I believe my last post regarded 3DO's lack of productivity. Since then 3DO has finally realized the work that has been going on behind the scenes for far too long. M&MVI has been released as has Army Men and High Heat Baseball. Although I rarely speculate, I will predict that at minimum M&MVI will sell 200,000 copies, Army Men 100,000 and High Heat (I'll be nice and say 25,000)will be a loser for 3DO. Add another 20,000 copies of Uprising for goodwill. People have previously suggested profit margins of $20/game on software titles but I have never agreed. Instead I believe margins are more in the $15 range based off of pricing pressures due to the large number of titles. This gives us an immediate revenue of roughly $5,175,000. While this is quite an improvement over fourth quarter revenue of $1.6 million, operating expenses for the fourth quarter were $7.7 million. Again, my numbers are pure speculation. But, while 3DO will obviously make a huge improvement on the revenue side, it will probably not post a profit unless costs are cut once again. It would be rare for only 2 titles to make a company profitable (although in the past I have continually reiterated the advantages that 3DO will have as an upstart producing only a few games versus companies that produce many more, with emphasis on AKLM). 3DO having a profitable quarter would say little more than 3DO finally RELEASED some decent titles. It's important to remember the amount of cost that went into these few games. Both of these products have been long in development and way past their original deadlines. Uprising may actually see a pick up in sales since its initial release due to the release of Battlezone. Battlezone is receiving rave reviews and drawing attention to the category. It certainly doesn't hurt that Uprising is almost always mentioned in the same review. Uprising is also compared directly to Armor Command in a separate text box in the CGW review of Armor Command on p.250 of June CGW.
What's more important is a look to the future. If anyone personally knows any 3DO employees, I encourage you to ask them how development is going. I do not. I can say though that they are certainly hyping their productivity. I was very surprised when I opened up June 1998's issue of Computer Gaming World ~1 month ago and found ads for Uprising 2 (www.uprising2.com), Requiem: Wrath of the Fallen (This Fall printed underneath the title), and Heroes of Might and Magic III. While all were 2 page ads, the simplicity and lack of detail suggests there is much work to be done for these titles (albeit Requiem has had alot of preview press so it is surely coming along).
The ads for currently released titles have also improved (I bashed their ads a few posts ago). While Might & Magic VI grabs one's attention through the ads detail and artwork, Army Men's simplistic, quizical nature certainly compels one to look at the beautiful screen grabs printed on the lower half. High Heat's ad is more of a sincere introduction of the team behind the game than an ad for the game itself. A political ad or an ad for public interest activities by a corp. such as Mobil, Exxon or more recently a plastics industry ad come to mind.
Although this may be 3DO's turn around quarter(s), 3DO's productivity is still in question as the only titles we have seen released have been in development much to long. The next batch of releases will give us the first opportunity to reappraise 3DO's quantitative output. Equally important is the quality of titles. 3DO has so far overcome its history of poor titles. M&MVI has been received very well, Army Men while off to a slow start has been catching on given it's reputation as one very fun game. While High Heat Baseball may not be nominated for any awards, I can't recall the a 1st release of a sports game ever making a huge break into the sports arena (except for maybe the EA Sports Genesis games) especially given the fact that it is now a very crowded field (ouch, these sports puns are not intended whatsoever). Requiem is being previewed quite positively esp. in regards to its very unique theme. Of further importance is what I perceive 3DO's initial strategy being: creating a name brand of games it can continue to build on. They obviously are carrying forward the Uprising series, M&M, and Heroes. I would not at all be surprised if Army Men 2 is not already under development as is a new High Heat. Having so many quality series to its name is a very good strategy for 3DO at this time. Not only will it help bolster it's reputation by building on previously successful games, but also lower the time it takes to get a new game to the market (very important given so few games 3DO has in it's line-up as of now). This fact can only be viewed in a positive manner when speculating on 3DO's future productivity (although the time between M&M V and VI was quite large).
I would now be back in 3DO if it would have hit 2 15/16 this past week. Unfortunately, it hit a ask of 3 1/16 and I did not buy in. The next quarter's results should make for a decent opportunity for trading and may buy back in if/when the price takes a slight hit.
Questions/Comments?
Christopher Hinton
P.S. I will be the first to admit my speculative numbers may be WAY off. Secondly, since I first started my message, Timothy Wojnar has posted an interesting article that gives us a hint at 3DO's future productivity. |
