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QPSA December Membership PR, eGames

So the registration continues strong. That is excellent.

A few points about the PR itself. Also eGames:

1. I wish they hadn’t felt the need to make excuses about the December number being ever-so-slightly lower than November’s. I guess the “distractions of the major holiday celebrations” were not in effect last year, as December 2009 registration was higher than November 2009.

2. A general statement about monetization so far, say for SnapMeUp, would have been really welcome, assuming that it is going well. We know there are millions of users signed up. Since the PR mentions expectations for the DSM platform through Sony and Grupo Expansion, and mentions eGames, I don’t like seeing no mention of things already in place. We know SnapMeUp has millions of players signed up; we don’t know if it is making money.

3. It appears that eGames is a tiny company on the brink of bankruptcy. This is from their September quarter earnings PR:

“Liquidity Condition:
At September 30, 2010, eGames had $301,000 in cash compared to $627,000 at June 30, 2010. Considering our net losses for the most recent quarter and the last six fiscal years, and the fact that we do not currently have access to a credit facility, we are continuing to evaluate our options to fund future operations if eGames does not become cash flow positive from operations during the upcoming quarters.”

For our purposes, however, eGames only needs to have one great game. They have four under development.

And it looks EGAM has some moxie. I like that they are “forging ahead” in spite of difficulties (and they deserve a prize for the name Satisfashion).

"We are encouraged by the continued increases in our traditional product revenues due to strong sales of our physical products at the large national retail chain stores in North America but we are also challenged by the general market conditions and trends in our industry that have decreased our Internet-related revenues as well as our licensing revenues," stated Jerry Klein, eGames President and CEO. "We continue to forge ahead with our social game development and distribution strategy, with the launch of our next two social games, Satisfashion and Coffee Central, expected by the end of this year on the major Latin American social networks. We have two additional social games currently in development which are expected to be released during our 2011 fiscal year," Klein said. "The free-to-play micro-transaction model used for social games has been substantiated as a sustainable and profitable business model while social games continue to grow in popularity. Our plan is to maintain our focus on this segment of the market and develop top-performing games", added Klein.

I also like the completeness of the financial information they give in the PR. For example, they explain a $132,000 increase in opex.

The $132,000 increase in operating expenses resulted from:
• $168,000 in increased product development expenses related to having four games under development for the Latin American social networks and one game under development for the iPhone during the current quarter compared to last year's first quarter only having two titles under development; and
• $36,000 in decreased operating expenses across various categories.

Let’s hope one of the four new games is really, really good – for them and for us.