20th Sep 2013 09:54
LONDON (Alliance News) - Keywords Studios PLC Friday said it now expects its 2013 profits to be only in line with 2012, after games publishers delayed titles ahead of the release of the next generation of games consoles.
Additionally, the games consoles will be launched in fewer territories initially than Keywords expected, harming a company that specializes in the localisation of video games.
In a trading update, Keywords said that it had increased revenues by 12% in the first half of its financial year, to EUR7.2 million from EUR6.4 million in the previous year. Pretax profit for the half year ended July 8 was EUR400,000, down from EUR1.4 million in the previous year as it invested in expansion, opening an office in Seattle and increasing headcount.
The launches of next-generation games consoles, Xbox One and Playstation 4, in the second half of the year will increase activity, the company believes, but the impending launches have prompted several publishers to defer launches of their current-generation titles in order to focus on new-generation games and benefit from the publicity that will surround the console launches.
As a result, Keywords expects a weighted second half of the year, with margins up on the first half, but, following the scaling back of launch territories for the next-generation consoles, it believes that the overall video games service market will be softer than it had previously expected.
Keywords provides localisation and testing services for the games industry, meaning that it caters and prepares video games for release in global markets, including translating text, casting and re-recording dialogue and proof reading.
Two consoles will be launched in November a week apart. The Xbox One will initially launch in 13 markets, and the Playstation 4 in 32 markets, with launches in Asian territories planned for December. Microsoft's decision to scale back its initial launch markets for Xbox One to only 13 caused controversy, as it had originally intended to launch in 21. This means that most of the Nordic territories and Russia will not receive the console until an unspecified point in 2013.
"While it has proven difficult to predict the exact timetable of forthcoming launches, 2014 is expected to be a year of significant activity for the games industry, leaving us well placed for substantial growth in the year ahead," Chief Executive Andrew Day said in a statement.
The company's shares were down 19% at 133.00 pence Friday morning, one of the biggest falls on the London market.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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