Midway Games Placing Bets on Quality

Q: One of the things you have been talking about is trying to put a real emphasis on improving the quality of your games. How is that working out?

If you go back to Jan. 1 of last year to today, there's only one publisher whose average review scores for all their games -- I mean, obviously, for nonbudget titles -- is above 80. Electronic Arts'(ERTS Quote) is about 78. And that's Midway. So Midway has the No. 1 review score over the last 16 months, year-to-date...

We don't care whether we are No. 1 or No. 5, but our goal is really to be among the top five in the industry. If you go back to 2002, 2003, we're No. 20. So, is it paying off? You've got to make quality games. You've got to market them effectively. You've got to make the right games. And that's what we're very focused on right now.

We're concept-testing all of our games that we're putting into development for the next generation. We're going to make sure that they are titles that, if they're good, have the potential to be big sellers. There's a lot of very good games in this business that before they even started being made were never going to be big sellers -- because of their subject matter, because of the type of game they were. And that's a mistake you really have to avoid in this business, because if you make a great game that nobody cares about, it doesn't really matter.

Q: You said your goal this year is to grow revenue by 40%. But revenue actually declined in the first quarter. What happened there?

Quarters don't mean anything. I think last year we had Mortal Kombat in there, so quarters don't mean anything. Our guidance for this year is $225 million in revenue, up from $161 [million] last year. That's a 40% increase.

Q: Can Midway continue as an independent publisher.

Absolutely. Why not? If you go back and look at Activision (ATVI Quote) and Take-Two (TTWO Quote), their revenue was the same as ours is today, and they both were able to grow their revenue base very rapidly and successfully to critical mass. Why? They were making quality games, and they were making the right games. And that's our plan.