Midway Games Inc. announced today that it expects its operating results for
the three months ended March 31, 2004 to be ahead of the financial guidance
provided by the Company on February 25, 2004. For the quarter ended March 31,
2004, Midway expects revenues of approximately $18.0 million, or 50% more than
the Company’s previously issued revenue guidance of $12.0 million. Midway also
projects a net loss for the quarter smaller than the Company’s previously issued
guidance of $19.0 million but not proportionate to the increase in the revenue
guidance for the quarter. Midway attributed the improved financial outlook primarily
to strong initial sales of the Company’s recently released action-horror game
The Suffering. Midway released The Suffering for PlayStation 2 and Xbox
on March 8, 2004.

Midway also announced today that it has acquired privately-held Surreal Software
Inc., developer of The Suffering, in an all-stock transaction for 540,317 Midway
common shares.

Midway President and Chief Executive Officer David F. Zucker commented, “The
positive market reception to The Suffering illustrates our ability to successfully
develop and release entirely new properties that resonate strongly with the
growing audience of sophisticated, mature gamers. The acquisition of Surreal
Software Inc., the visionary developer behind The Suffering, strengthens our
internal product development team and reinforces our ability to create high
quality games.”

Surreal Software Inc. is a leading videogame developer that has garnered broad
industry acknowledgement for creating high quality, cutting-edge games. First
receiving critical acclaim with the 1999 release of Drakan: Order of the Flame,
Surreal continued its success with Drakan: The Ancients’ Gates in early 2002.
Having grown to two development teams, Surreal developed The Lord of the Rings
– The Fellowship of the Ring in late 2002. Surreal most recently developed The
Suffering, an original concept action-horror game set in a secluded island prison,
for Midway. Surreal is based in Seattle, Washington.

In addition to shares issued for the acquisition of Surreal Software, a total
of 137,199 restricted shares of Midway common stock were issued to key Surreal
employees as retention incentives. The restrictions on the stock will lapse
in stages over a period of three years, provided the employee remains employed
by the Company. The Surreal employees who received restricted shares were: Richard
Rouse, Todd Clineschmidt, Andre Maguire, Tom Vykruta, Jason Merck, Beau Folsom,
Brigitte Samson, Scott Cummings, Andrew Poon, Boyd Post, Joe Olson, Eric Snyder
and Garret Smith.

Midway Games Inc. is a leading developer and publisher of interactive entertainment
software. Midway videogames are available for play on all major videogame platforms
including the PlayStation®2 computer entertainment system, Xbox™ video
game system from Microsoft, and Nintendo GameCube™ and Game Boy® Advance.

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