Shares of Eidos (EIDSY) slipped on Thursday after the London-based video game software maker said it would miss a key release date and announced that it would consider being taken over.
As part of the announcement, the company noted that it is delaying the release of its
ShellShock: Nam '67
title from next month until September. Due to the delay, the company now expects to post a bottom line of breakeven or a small loss for its fiscal year, which ends June 30.
Eidos attributed its decision to explore strategic alternatives, including a possible sale, to the changing nature of the video game market. It cited the cost of developing titles for the next generation of platforms, which analysts expect will hit the market as soon as next year.
The company has not settled on a course of action, but is exploring ways of remaining independent or selling its assets to a larger company, said Eidos spokeswoman Nina Devlin.
The company expects to update shareholders on the progress of its review by the beginning of September, when it plans to release its full-year results.
In recent trading, Eidos shares were off 7 cents, or 3.6%, to $2. The company's shares were off as much as 13 cents, or 6.3%, earlier in the day.
The company's announcement comes less than one month after Eidos
denied market rumors that it was a takeover target. At the time, the company said that it had neither been approached by possible suitors nor was in negotiations with them.
The delay in releasing
also marks the second straight disappointment with one of Eidos' leading titles. Last month, Eidos shares plummeted after the company warned that sales of its
title were falling short of expectations.
Perhaps best known for
Eidos is the leading video game maker in the U.K.
The company could attract the interest of the big video game makers in the U.S., particularly
, all of which lack European distribution arms, said Michael Pachter, who covers the video game industry for Wedbush Morgan. Any one of those three could end up buying Eidos, but the smart money is on THQ, said Pachter. Take Two is trying to get past a series of
earnings warnings and misses, while Midway lacks the resources to make an acquisition and is in the process of being
acquired itself by
CEO Sumner Redstone, he said.
THQ has been overly dependent upon licensed content, lacks European distribution, and would benefit from Eidos' owned intellectual property and distribution assets," Pachter wrote in a research note issued Thursday.
In afternoon trading, THQ shares were up 20 cents, or 0.9%, to $22.