HELSINKI (Reuters) - Finland’s Next Games reported on Tuesday falling fourth quarter sales from its mobile game based on AMC Networks’ TV show “Walking Dead”, knocking its shares.
The company, which generates revenue mainly from in-game purchases that players make with their smartphones, said its fourth quarter sales fell 42 percent from a year ago to 6.7 million euros ($8.3 million).
Its core operating result in the quarter dropped to a loss of 4.2 million euros from a profit of 1.6 million a year earlier due to falling sales and investments in new games.
Shares in the company fell 8 percent to 8.00 euros, returning close to last year’s initial public offering price of 7.90 euros.
“(The game’s) weak performance means that their future games need to succeed even better to patch up the revenue loss and to meet the company’s profit targets,” Inderes Equity Research, which has an “underweight” recommendation on the stock, wrote in a note to investors.
Next Games is pinning its hopes on a new “Walking Dead” title, expected to be released in the second quarter, in which players fight zombies that are superimposed onto the real world on smartphone screens.
That game is tapping into the trend of augmented reality (AR) which gained mass adoption in 2016 with the release of Niantic Inc’s Pokemon Go.
The company is also developing a game based on the sci-fi film “Blade Runner”, with an aim to test it with users during the first half of the year.
($1 = 0.8094 euros)
Reporting by Tuomas Forsell Editing by Jussi Rosendahl and Mark Potter