Konami Shares Suffer Largest Drop in Four Years Due to MGS4 Delay

[fitbabits]

According to Bloomberg (http://www.bloomberg.com/apps/news?pid=20601205&sid=a5PxAW9Ck70o&refer=consumer\) (a legitimate news agency, no less), shares in Konami fell to their lowest in four years following the announcement of a delay to Metal Gear Solid 4 on PS3.

Konami Corp., the Japanese maker of the "Metal Gear Solid'' espionage action game, fell the most in almost four years in Tokyo trading after the company's delay of the latest installment prompted concerns earnings growth may slow.

The company, which developed the game for Sony Corp.'s PlayStation 3 console, will sell the title in the second quarter of 2008, delaying from "winter'' this year, Konami said yesterday. Earnings in the year ending March 31 were expected to be boosted by sales of about 1 million copies of the game, said Mitsubishi UFJ Securities Co.

"Investors were active sellers today because of disappointment over the delay,'' Mitsubishi UFJ analyst Hirotoshi Murakami said by telephone from Tokyo. "It may be the company's strategy to boost earnings next fiscal year with the game software.''

The analyst has a "strong outperform'' rating on the stock.
:eek:

[Johan]

Good time to buy Konami shares. Buy low, sell high.

Now, if they keep MGS4 on the PS3 only...sell now and cut your losses!

[Mal.Reynolds]

Seems like stuffs just getting bigger and bigger with this ... Which could me 360 MGS4 which would be wicked ... only reason i really really want a PS3 But im not holding my breath on that one its not coming to 360 anytime soon even if i hope it would....


Right now this is one game i'd buy the PS3 for ...

[gzsfrk]

Johan, I was thinking the same thing. If their stock is taking a hit and they need to turn their financial fortunes around, are they going to be able to turn down an almost guaranteed 2 million game sales of MGS4 on the 360? It wouldn't hit that number overnight, of course, but I'd imagine sales would get there within 6 months, easily enough.

So--2 million sales of a $60 game, with the publisher pocketing around $25 per copy after licensing/production and retailer overhead on the 360. That'd be roughly $50 million in revenue minus whatever costs it would take to port the finished game from PS3 to 360.

It's been suspected to be coming to the 360 for awhile, but I have to think that financial pressure on Konami at the corporate level can only increase the odds that MGS4 will see the light of day on the 360.

EDIT: Forgot to mention that the counter-argument to what I wrote above is that maybe Konami is waiting til 2Q 2008 to release the game so that they CAN release only on the PS3, when it should have a good deal larger install base than at present.

[JimmyDanger]

Johan, I was thinking the same thing. If their stock is taking a hit and they need to turn their financial fortunes around, are they going to be able to turn down an almost guaranteed 2 million game sales of MGS4 on the 360? It wouldn't hit that number overnight, of course, but I'd imagine sales would get there within 6 months, easily enough.


I'd wager It'd sell a million worldwide in the first week - 2 million in the first month...

[Entropy Effect]

Sometimes these articles need to be read a little more thoroughly before the news item is posted. Just to clarify: Konami shares ARE NOT at their lowest price in 4 years. After the announcement, the share price fell 6.8%, which was their LARGEST DROP in 4 years. The share price is still pretty near the highest it has ever been.

Edit: More info - http://stocks.us.reuters.com/stocks/overview.asp?symbol=9766.T

[JazGalaxy]

I think it's obvious that they are waiting for a larger PS3 install base. They need to release when it will be a hot item, not be an old game sitting on the shelf waiting for people to buy consoles.

The ironic thing is that there are probably a large number of people waiting on the game to buy the console.

It's like a staring match.

Konami: Sell more damn systems and we'll release our game!

Sony: Release your damn game and we'll sell more systems!

[Shodan2020]

Looks like I need to pick up some Konami shares.

I know those will go up. Especially once MGS4 comes out.

[scythe]

Sometimes these articles need to be read a little more thoroughly before the news item is posted. Just to clarify: Konami shares ARE NOT at their lowest price in 4 years. After the announcement, the share price fell 6.8%, which was their LARGEST DROP in 4 years. The share price is still pretty near the highest it has ever been.

Edit: More info - http://stocks.us.reuters.com/stocks/overview.asp?symbol=9766.T

LOL, yeah the title of this thread should be changed :S

[JimmyDanger]

Konami: Sell more damn systems and we'll release our game!

Sony: Release your damn game and we'll sell more systems!

MS : We has install base. Too easy. Like Money?

[VictorVonViolence]

Quick! Pump out another Castlevania!

[Adam Blue]

I think it's obvious that they are waiting for a larger PS3 install base. They need to release when it will be a hot item, not be an old game sitting on the shelf waiting for people to buy consoles.

The ironic thing is that there are probably a large number of people waiting on the game to buy the console.

It's like a staring match.

Konami: Sell more damn systems and we'll release our game!

Sony: Release your damn game and we'll sell more systems!

Well, the next 3D Castlevania is a 360 a exclusive because of the install base. I think the MGS4 PS3 exclusivity thing is because of Kojima.

Personally: Can't wait for Gradius VI. Konami for the wins.

[alienchild]

I just can't see how them waiting for a larger install base (if that is part of the equation) is a wise business decision... Anyways, the more financial problems Konami gets in the higher the possibility there is for a 360 version. This is good news :)

[MrMeatshake]

Konami shares ARE NOT at their lowest price in 4 years. After the announcement, the share price fell 6.8%, which was their LARGEST DROP in 4 years.

lol. quality reporting, as ever, on EvAv. :P

[fitbabits]

Sometimes these articles need to be read a little more thoroughly before the news item is posted. Just to clarify: Konami shares ARE NOT at their lowest price in 4 years. After the announcement, the share price fell 6.8%, which was their LARGEST DROP in 4 years. The share price is still pretty near the highest it has ever been.

Edit: More info - http://stocks.us.reuters.com/stocks/overview.asp?symbol=9766.T

Thanks. I've amended the headline.

[Deunnero]

I'd be really upset if I were Konami, I mean the delay is due in large part to the fact that the PS3 is plagued with problems. If Sony doesn't pony up to balance the loss, Konami will definately be doing some talking with MS.

On the flipside, if the delay is caused by the fact that Konami is developing for the 360, then they know that this loss is temporary and that they expect the 360 release to be massive.

Either way, don't expect much until late spring in terms of talk. ;)

[Roc Ingersol]

I think it's obvious that they are waiting for a larger PS3 install base.That would explain a delay from Q4 07 to Q1 08. But now we're talking about it slipping back to their next fiscal year.

This looks much more like Konami stacking their next fiscal year. If they've already hit their revenue/growth targets - why 'waste' half of MGS4's sales in 07?

[Xerxes]

I'm with most of you, the president of Konami is probably figuring out how to tell Kojima, how despite his "it's exclusive claims", that it isn't going to be.

[Evil Avatar]

I'd wager It'd sell a million worldwide in the first week - 2 million in the first month...

With the PS3 sitting at only 1.9 Million units sold worldwide, it is basically impossible for MGS4 to sell a million copies. That would mean 50% of al PS3 owners would need to buy MSG4. That just isn't going to happen.

[Gorvi]

With the PS3 sitting at only 1.9 Million units sold worldwide, it is basically impossible for MGS4 to sell a million copies. That would mean 50% of al PS3 owners would need to buy MSG4. That just isn't going to happen.
It's actually at about the 5 million mark. 1.9 million was the number for the US only as of September I think.

[KingGorilla]

Correct me if I am wrong, but isn't Konami the only videogame publisher, developer, etc. in Japan that exclusively makes games? The rest of them have a much more diverse revenue stream. Nintendo and Namco dabble in toys and television. Square has the films and food lines. Capcom has a lot of the merchandising, television, and movies. I do not think Konami enjoys similar windfalls during lean times.

[oldjadedgamer]

Correct me if I am wrong, but isn't Konami the only videogame publisher, developer, etc. in Japan that exclusively makes games? The rest of them have a much more diverse revenue stream. Nintendo and Namco dabble in toys and television. Square has the films and food lines. Capcom has a lot of the merchandising, television, and movies. I do not think Konami enjoys similar windfalls during lean times.

Correction:

Konami owns health and physical fitness clubs in Japan and also makes Casino machines in America.

http://www.konamisportsandlife.co.jp/

[TeeCakes]

It's actually at about the 5 million mark. 1.9 million was the number for the US only as of September I think.

And this is technically what they would refer to as a "system seller." So, 1 mill copies worldwide of MGS4 in the first month, week, day, take your pick, it's totally doable. Konami just doesn't want to be the 'first' out the gate, it seems. Little performance anxiety, perhaps?