INTERVIEW-UPDATE 1-Infogrames bets on 'Alone in the Dark'

Thu Apr 10, 2008 11:06pm BST

Quotes

   

* CEO aims to sell 2-3 million units of new game

* CEO expects Q4 2007/08 revenue to fall year-on-year

* CEO says has not changed 2007/08 revenue guidance

(Adds details)

By Dominique Vidalon and Cyril Altmeyer

PARIS (Reuters) - France's Infogrames IFOE.PA expects to sell 2-3 million units of "Alone in the Dark" in the current fiscal year as it banks on the new high-adrenaline action game to boost revenue, its new head said on Thursday.

Chief Executive David Gardner also told Reuters in an interview that his top priority was to return the loss-making company to break-even.

Gardner said he wanted to boost the contribution of the United States to global revenue and that he had not been approached by any potential buyer of the company, which has a market capitalisation of $257 million.

Infogrames, which owns Atari Inc and whose finances were severely dented by the cost of past acquisitions, is viewed as a takeover target in a rapidly consolidating industry.

In January, Infogrames appointed Gardner, a video games veteran and former Electronic Arts ERTS.O executive, to turn around the company hit by product delays and financial troubles.

"We want to stop losing money ... This management's team number one goal is to get a business plan together that gets us to a break-even level."

He would not commit to a specific timetable.

Infogrames is releasing "Alone in the Dark," a game in which hero Edward Carnby must, over the course of one night uncover secrets hidden in New York's Central Park, in June.

It will be available for the Wii, PlayStation 2, XBox360 consoles and on PCs on June 20 in Europe and on June 24 in the United States.

"Over the life of the product in this business year across platforms we are expecting between 2 and 3 million units," Gardner said. Infogrames's fiscal year runs from April to March.

The release was pushed back from the fourth quarter which ended on Mar. 31. Asked about the impact of the delay on fourth-quarter sales, to be published on May 14, Gardner said:

"The fourth quarter is going to be obviously smaller than Q4 a year ago because the core release that was going to make the core of revenue is now in Q1."

He backed a previous goal to stabilise revenue in 2007/08. "For the full business year, we are not announcing any different guidance. So it's in the region. I would not expect a full year increase but I would not expect to be much different either from last fiscal year considering currencies and all that."

Unlike competitors, notably domestic rival Ubisoft (UBIP.PA), Infogrames has not fully benefited from an upturn in the market resulting from the launch of new generation consoles.

That is mostly because it had to sell studios and reduce research and development spending to curb losses at its U.S. unit Atari Inc. ATAR.O

Infogrames had an operating loss of 61.8 million euros on sales of 305 million euros in fiscal year 2006/07

STRATEGIC PLAN

Gardner said the first 12-month stage of his strategic plan would be presented to the board at the end of this month.

"If they are happy with what we are thinking about then we will take the time horizon to further two years to have a multi-year horizon in the (next) board meeting ... in May."

Infogrames raised 150 million euros earlier this year through a convertible bond issue to restructure and cut debt.

Gardner plans to use part of the funds to hire creative staff, beef up the company's product pipeline, and boost sales from online gaming, one of the strongest segments of the market.

Infogrames owns 51 pct of U.S.-based Atari Inc, which has struggled for years to compete in video games against leaders like Electronic Arts ERTS.O and Activision (ATVI.O).

In March, Infogrames unveiled plans to buy the rest of Atari for some $11 million. Atari has yet to respond.

Gardner said if the offer were successful he would de-list Atari Inc and integrate it into the Infogrames group.

"Completing the acquisition would mean it costs us less to do business in America because we would not have a listing cost and at management level we would operate as one team and take decisions much quicker," he said.

(Editing by Paul Bolding)