Shares of

Eidos

(EIDSY)

plunged Thursday after the video game software maker warned investors that shipments of one of its latest titles will fall far short of expectations.

Meanwhile, the company denied recent rumors that it has been approached about a possible takeover.

Eidos now expects it will ship up to 700,000 less copies of

Hitman: Contracts

than it previously expected. Depending on sales of other titles, the shortfall could decrease the company's operating profits by about $16 million, Eidos estimated.

That could be a big hit to earnings for a company that posted operating profits of just $23.32 million and net profits of $34.07 million in fiscal 2003.

Fearing the worst, investors dumped the company's shares on Thursday, sending the stock as low as $2.12 intraday. In recent trading, Eidos' stock was off 96 cents, or 29.3%, to $2.32.

The company, best known for its popular

Tomb Raider

series, blamed

Hitman's

underperformance on a general softness in the video game software market. Sales of video game titles in April were less than analysts expected. Meanwhile, the U.K.-based company noted that

Hitman

has been among the top selling games in the U.S. and Europe since it was released.

It remains to be seen whether other companies will report similar problems. With the bulk of video game software sales coming during the holiday season, April is a relatively unimportant month for video game makers.

Rumors have circulated in recent months that Eidos is a takeover target. But the company flatly denied that it either had been approached by possible suitors or was in negotiations with them. Such denials probably weren't helping the shares on this day.