Acclaim Reports Large Loss, May Face Bankruptcy

Thanks to Yahoo!/Reuters for its story revealing videogame publisher Acclaim Entertainment has announced a quarterly loss of $25.4 million, and warned of possible bankruptcy, since "needs new cash to replace a financing agreement... that expires on Aug. 4." Apparently the company "has signed a letter of intent with a different lender to borrow up to $30 million but the deal has not yet been completed." The long-standing publisher has also recently been sued by the Olsen Twins, although it still lists upcoming titles as including 100 Bullets, The Red Star, Worms Forts: Under Siege!, and Interview With A Made Man. Update: 07/03 01:34 GMT by S : Acclaim's 10-K financial statement reveals "notification from The Major League Baseball Player's Association (MLBPA) that we were late in making certain royalty payments and our license was terminated", and "due to failure to make certain royalty payments relating to the videogame title Turok: Evolution... our [Turok intellectual property] license agreement with Classic Media was terminated."

Comments

GOOD.

[Pluvius]

In over 15 years, Acclaim (aka Acclame LOL) has put out practically nothing but drivel. I seriously can't think of one good game that they were responsible for, and a ton that were complete crap (Airwolf, Destination: Earthstar, and Total Recall to name a few, and that's just on the NES!). Moreover, Acclaim's main subsidiary during the NES days was LJN, which made execrable movie-license games like Back to the Future 2 & 3 and Bill and Ted's Excellent Video Game Adventure. I honestly don't know how they survived longer than companies that made decent games (e.g. Sir-Tech, 3DO, Microprose). Good riddance.

Rob

Nostilgia

[wileycat]

Mabye they should put out a 10-in-1 TV Game like everybody else and pull some cash in that way. Now to find 10 old Acclaim games that I liked.....

A nice dream

[JoelMeow]

I'm reminded of a comic

To be honest, I don't know that much about Acclaim's games. The only thing I remember about them are some rather dubious advertising campaigns, which I don't think they actually ever meant to follow through on. I think they were just proposed for the shock value, the whole "any publicity is good publicity" idea.

I decided that I didn't want to buy any of their games because I didn't want to encourage that behavior, but I don't recall the issue actually coming up. They didn't make any games I was interested in.

Re:Chump Change

[Colazar]

So I went and looked at theire financials, and it looks like they actually died back in 2000, with a horrendously bad year. They stayed afloat by borrowing a large amount of money (~$50 million), and the interest payments on that doubtless kept them below water ever since. Their operating cash flow has been negative ever since, with the only cash they've generated having been from the sale of stock. So really, it's just taken 3 years for their corpse to stop twitching.

The other thing I noticed which would have sent up an immediate red flag to me is that they factor their receivables. Now, it wouldn't surprise me if that was industry standard practice (this is not my industry), but in my experience the terms on factoring are usually so bad, that if you have to depend on that for your cash flow for more than a short time, you're already in danger. Maybe I'm just too cautious, but that's usually enough to keep me away from a company right there.

Didn't look like their G&A was particularly bad, or that their managers were unreasonably compensated. They just didn't sell enough games.

Re:Chump Change

[kilrogg]

http://finance.yahoo.com/q/pr?s=AKLM

James Scoroposki, 55 Co-Chairman, Sr. Exec. VP, Treasurer, Sec. $ 312.00K
Gregory Fischbach, 61 Co-Chairman $ 479.00K
Rodney Cousens, 52 CEO $ 1.30M
Gerard Agoglia, 52 CFO, Exec. VP $ 28.00K

The CEO of a company heading to bankruptcy makes 1.3M per year!!! Holy crap, I chose the wrong career.