Majesco bet big on NBA Baller Beats but came up with a bad hand instead. The publisher reported a year over year loss in profits Monday which can partly be attributed to the $1.3 million inventory write off for the Xbox 360 Kinect basketball rhythm game.
Majesco posted revenues of $132.3 million for the fiscal year ending October 31, 2012. This is up 6 percent year-over-year. However, profits dropped to $4.6 million from the $6.8 million the company made the previous year.
NBA Baller Beats was released in September 2012 but did not sell well as Majesco noted, “industry praise didn’t turn into the revenue that we expected.” The publisher blamed this in part on slower sales of Kinect but I have to wonder how if sales estimates weren’t overblown for the title to begin with.
I picked NBA Baller Beats up when the game and basketball combo hit a clearance price of $20. It’s a decent rhythm game with a solid soundtrack but has environmental requirements unlike those of any other Kinect game. It requires a generous play space with no carpet on the floors and nothing breakable around lest the player loses control of the ball. If that weren’t enough, there has be no concern for noise caused by the constant dribbling of a basketball. Bouncing the ball around in the basement earned my son an immediate rebuke from my wife who could hear it from the top floor.
In short, NBA Baller Beats goes against everything your mother tells you about bouncing a ball in the house which is probably why it was a non-starter for Majesco. Compare that to sales of the more “home friendly” Zumba exercise titles which met its sales projections.
Due to the drop in profits, Majesco has closed its social game development studio in Foxboro, Massachusetts, and reduced the number of game testing personnel at its New Jersey office.
“We plan to continue to support our established franchises, look for opportunities to reach new audiences through mobile devices and position the Company to capitalize as new platforms grow and gain consumer acceptance,” CEO Jesse Sutton said in the financial report.
Interestingly, Majesco said it will only provide “qualitative” projections for 2013 instead of “quantitative.” This move away from hard number projections is similar to what THQ did prior to going bankrupt but Majesco is not in such dire straits with $31.3 million in combined cash and availability and no long-term debt.
Majesco shares plunged 34 percent in trading on Tuesday as a result.