n 3 º
06-28-2004, 12:43 AM
CEO Herve Caen
looks on the bright side as his company reports it will run out of money by the end of
July.
Today, Interplay reported its quarterly earnings--a
net loss of $900,000 for the quarter ending March 31, 2004. During the same quarter a year
ago, the company reported a profit of $5.6 million. The news was especially bad, considering
Interplay had largely staked its fortunes on two major titles, Baldur's Gate: Dark Alliance II and
Fallout: Brotherhood of Steel, released during the quarter.
The effect of the two
games' disappointing sales was made painfully clear by the 10-Q report Interplay filed with the
U.S. Securities and Exchange Commission. Buried inside was the revelation that Interplay will
run out of cash in five weeks unless it receives an injection of capital. "The company
anticipates its current cash reserves, plus its expected generation of cash from existing
operations, will not be sufficient to fund its anticipated expenditures through the second quarter
of fiscal 2004," read the report. "If we do not receive sufficient financing we may (i) liquidate
assets, (ii) sell the company (iii) seek protection from our creditors including the filing of
voluntary bankruptcy or being the subject of involuntary bankruptcy, and/or (iv) continue
operations, but incur material harm to our business, operations or financial conditions."
Today's financials follow reports earlier this week that Caen faced a number of
disgruntled employees seeking back pay. According to the Orange County Register, some of
the more than 20 Interplay employees who claim they had not been paid since April confronted
CEO Herve Caen at a meeting mediated by the California Division of Labor Standards
Enforcement. A ruling will be made shortly on those complaints.
Despite its grim
situation, Interplay issued a press release announcing an audacious plan to parlay its prized
Fallout brand into a massively multiplayer role-playing game. A surprisingly upbeat Caen said in
a statement that, "based on a detailed review of where our industry stands and the level of
interest in the gaming community in taking some of our premier properties online, we are now
pursuing several options to fund our entry into massively multiplayer online gaming with titles
including Fallout."
Caen expressed optimism that catapulting the Fallout universe into
the online arena could reverse the fortunes of the once-successful developer and publisher.
"Initial feedback from our investment bank and ongoing dialogue with others in the gaming
sector," Caen said, "appear to confirm that the combination of our valuable and popular
intellectual properties with the rapidly growing online gaming community is the best way to
maximize Interplay shareholder value."
Today's developments follow a recent spate of
bad luck for Interplay. The past few months saw the publisher temporarily shut down by state
labor officials, threatened with eviction, sued by BioWare and Warner Bros., and its Web site
go offline indefinitely. Nonetheless, Caen is chipper about his company's future. "Several
short-term obstacles remain for Interplay, [but] management is focused on simultaneously
financing and executing our new long-term strategy and finding ways to solve these short-term
issues."
looks on the bright side as his company reports it will run out of money by the end of
July.
Today, Interplay reported its quarterly earnings--a
net loss of $900,000 for the quarter ending March 31, 2004. During the same quarter a year
ago, the company reported a profit of $5.6 million. The news was especially bad, considering
Interplay had largely staked its fortunes on two major titles, Baldur's Gate: Dark Alliance II and
Fallout: Brotherhood of Steel, released during the quarter.
The effect of the two
games' disappointing sales was made painfully clear by the 10-Q report Interplay filed with the
U.S. Securities and Exchange Commission. Buried inside was the revelation that Interplay will
run out of cash in five weeks unless it receives an injection of capital. "The company
anticipates its current cash reserves, plus its expected generation of cash from existing
operations, will not be sufficient to fund its anticipated expenditures through the second quarter
of fiscal 2004," read the report. "If we do not receive sufficient financing we may (i) liquidate
assets, (ii) sell the company (iii) seek protection from our creditors including the filing of
voluntary bankruptcy or being the subject of involuntary bankruptcy, and/or (iv) continue
operations, but incur material harm to our business, operations or financial conditions."
Today's financials follow reports earlier this week that Caen faced a number of
disgruntled employees seeking back pay. According to the Orange County Register, some of
the more than 20 Interplay employees who claim they had not been paid since April confronted
CEO Herve Caen at a meeting mediated by the California Division of Labor Standards
Enforcement. A ruling will be made shortly on those complaints.
Despite its grim
situation, Interplay issued a press release announcing an audacious plan to parlay its prized
Fallout brand into a massively multiplayer role-playing game. A surprisingly upbeat Caen said in
a statement that, "based on a detailed review of where our industry stands and the level of
interest in the gaming community in taking some of our premier properties online, we are now
pursuing several options to fund our entry into massively multiplayer online gaming with titles
including Fallout."
Caen expressed optimism that catapulting the Fallout universe into
the online arena could reverse the fortunes of the once-successful developer and publisher.
"Initial feedback from our investment bank and ongoing dialogue with others in the gaming
sector," Caen said, "appear to confirm that the combination of our valuable and popular
intellectual properties with the rapidly growing online gaming community is the best way to
maximize Interplay shareholder value."
Today's developments follow a recent spate of
bad luck for Interplay. The past few months saw the publisher temporarily shut down by state
labor officials, threatened with eviction, sued by BioWare and Warner Bros., and its Web site
go offline indefinitely. Nonetheless, Caen is chipper about his company's future. "Several
short-term obstacles remain for Interplay, [but] management is focused on simultaneously
financing and executing our new long-term strategy and finding ways to solve these short-term
issues."