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Conclusion
SCi has successfully
executed its most bold, and dangerous, step yet with the acquisition and ongoing integration of rival publisher Eidos, a company that boasted over four times its turnover. That SCi has reached this
position is remarkable and would have been unthinkable even months before it made its intentions publicly known. However the speed with which the Eidos share price fell and the SCi share price rose in the run up to
the acquisition coupled with the steady financial performance recorded by SCi made such a bold move possible.
The Company has now announced that it has completed its integration of the two businesses and it
certainly had its work cut out although the accompanying £60m raised for precisely this purpose has undoubtedly been useful. The integration of two very different publishing strategies and management cultures is
fraught with difficulties but appears to be been accomplished smoothly and successfully. Tomb Raider: Legend has exceeded sales forecasts comfortably and has, crucially, revitalised this critical franchise whilst
Hitman: Contracts looks set to perform impressively too. Shareholder patience should be rewarded with an dramatic return to profitability in the year to 30/06, an accomplishment made more impressive by the fact that
most publishers are reporting performance declines in 2006.
With a recent supplementary fund-raising of £17.4m, SCi's balance sheet is secure enough for the Company to start looking at non-core gaming revenue
opportunities in casual, MMOG and mobile gaming markets. Indeed, with its key franchises back to full-strength, SCi's prospects have not been greater although it still has to manage the tricky and potentially
expensive transition from current to next-gen development and publishing over the next two years.
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