Gameloft Q4 sales €25.8 mln, 2007 revenue up 40%

Gameloft posted consolidated sales of €25.8 mln in the last quarter of 2007, up by 19% from the previous year. On a comparable exchange rate basis the fourth quarter growth would have reached 26%.

Full year sales increased by 40% compared to 2006, reaching €96.1 mln, in line with the company’s guidance. Sales of downloadable games, the company’s core business, reached €90.2 mln in 2007, increasing by 45%.

Europe represented 44% of sales for full-year 2007, North America 34% and the rest of the world 22%. The sharpest growth took place in the rest of the world, up 86%. In contrast, North America was the slowest growing region primarily due to the drop in the dollar and clear slowdown in growth of the U.S. market in the fourth-quarter. In 2006, Europe, North America and the rest of the world represented respectively 43%, 41% and 17% of Gameloft’s total sales.

 

— 2007 highlights

 

In 2007, Gameloft’s organic growth exceeded that of its main competitors, thus reinforcing its position as the leading mobile gaming company in Europe and the second largest player in the US. The market shares gained by the company in 2007 are due to the strong performance of Gameloft’s back catalogue, which continued to account for more than 70% of downloads, and also investments in R&D. These investments allowed the release of more games than competitors on more handsets across more countries. To date, Gameloft’s catalogue includes 200 mobile games adapted to over 1,200 different handsets and sold in over 80 countries via direct distribution agreements signed with more than 180 carriers.

 

— Outlook 2008

 

Gameloft had a staff of 4,000 at the end of 2007, up 50% over the end of 2006.

With these employees, Gameloft can support the growing number of handsets selected by the carriers while releasing between 70 and 80 new games a year.

The company’s current staff will also allow it to capitalize on its investments in R&D and brands by adapting part of its game catalogue on new devices close to mobile phones such as the iPod, Nintendo DS, Xbox Live Arcade, etc. This should drive further sales increases and market share gains in 2008. Over the first half of 2008, Gameloft is planning to release many high-potential titles such as Grey’s Anatomy, Might & Magic Online, CSI: the mobile game, Block Breaker 2, etc.

The sharp drop in the dollar and the slowdown in the growth of its market in the United States have led Gameloft to slightly revise downwards its forecasts for 2008. The company is now planning growth in sales of 25% to 30% for 2008 as well as an operating margin (excluding employee stock based compensation) expected between 10% and 15%.

Expected growth in 2008 is still strong and the company is in a position to become a leader in a market of 4 bln potential consumers in 2010.