eGames reported its quarterly results yesterday: eGames Announces Second Quarter Fiscal 2006 Financial Results.
Their sales dropped 40% and they lost money.
Jerry Klein, President and CEO of eGames, commented ``The second quarter of fiscal 2006 was a challenging period that represented a transitional phase for our business as we began reallocating our resources to increase our product distribution at retail. We continue our aggressive search to secure rights to higher quality gaming content from third-party software developers, which we plan to release for retail distribution at higher price points during the second half of this fiscal year. These titles include our recently announced Space Rangers 2: Rise of the Dominators, Buccaneers Bounty, and Neighbors From Hell: On Vacation, all to be released under the newly introduced Cinemaware Marquee brand. Our recent acquisition of the Cinemaware intellectual properties, including its well recognized gaming brand, represents an important step toward improving the quality and brand recognition of our portfolio of consumer games.
Klein continued, ``As we have stated previously, we realize that for eGames to grow we must expand our business beyond the value-priced PC software market and penetrate other retail gaming markets, such as higher-priced PC and other gaming platforms. These markets continue to represent greater growth and profit potential compared to the value-priced PC software market segment we have primarily focused on in the past.
It sounds like they are trying to move away from casual games just as casual games are booming. Their problem is simple - they price their products too low. You can't make any money selling CDs at retail for less than $10. They need quality product that sells for $20 or $30 dollars, where you can make money. They missed the whole casual games boom because they didn't focus on the right price points.
Heya - long time lurker first time poster ;)
In my case and for some other people I know, the problem with eGames isn't really the price - it's trust. One of their titles crashed spectacularly on my father's machine because it had no network support installed at the time.
Why the need for a network connection? After investigation I found out it was for adware.. it was a pain to remove it all. Since then I stay far away from eGames boxes...
No idea if they still do it, but I'm just not willing to risk it.
Posted by: Martin | February 15, 2006 at 03:10 PM