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Technology Stocks : 3DO: Hot Games for Hot Machines (THDO) -- Ignore unavailable to you. Want to Upgrade?

To: G. H. who wrote (3317)	7/9/1998 9:28:00 PM
From: Schiz	Read Replies (2) \| Respond to of 4081

I have a few thoughts on this. I did a little number crunching just using last years totals. Publishing Revenue: 9.5MM Cost of Revenue: 3.9MM R&D(/4): 4.79MM Sales & Marketing(/4): 1.40MM Administrativ(/4): 1.83MM Total = -2.4MM/~27MM= -$.09 I used the FY98 totals for the calculations. This may be inaccurate due to possible costs associated with hardware and profit margins (cost of revenue could be lower due to popularity of games). The number could be a bit better if: 1. Cost of revenue is less due to the hit games 2. Overall costs are less due to last years numbers containing hardware costs or possible cost reductions. 3. The revenue is >10MM (maybe they are being conservative). The number could be worse if: 1. Sales and marketing costs have increased (new ad agency) 2. Overall costs have increased in an effort to increase revenues in the years to come. Put everything together and I would guess around -$.07 That's pretty much just a guess though. I'd really like to see a profit but I think we may have to wait until Q2. If they can have two games in Q2 with the success of MMVI and AM then profitability should be all but guaranteed. Any comments about costs this quarter vs last year would be appreciated. Please let me know if I'm overlooking something. I'll try to find out what games are to be released this quarter. Any links to this info would be appreciated, otherwise I'll probably just check their website.