Investment Column: Wind set fair for SCi shares on launch of Galleon

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The Independent Online

Action! Wonder! Mystery! Romance! From the creator of Lara Croft comes a new epic adventure....

Action! Wonder! Mystery! Romance! From the creator of Lara Croft comes a new epic adventure....

The public relations machine has swung into action ahead of the launch of Galleon, the next swashbuckling computer game from SCi Entertainment, who has secured the talents of Toby Gard, the creator of the Tomb Raider series owned by Eidos.

In stark contrast to Eidos, which issued a profit warning last month, SCi has enjoyed very strong trading indeed. Its Conflict series (which will include a third title, Conflict: Vietnam, later this year) has continued to sell well, while the Italian Job is still appearing in the games charts more than two years after its launch.

As Eidos's disappointing sales of Hitman: Contracts attest, this is a risky business. One bum title could blow a hole in sales forecasts. SCi, though, outsources both development and marketing and negotiates distribution deals with a guaranteed minimum sales figure. It is at the lower end of the risk scale, and its shares have performed very well since we tipped them at 51p in January 2003. Yesterday's interim results showed that extra back catalogue sales had kept losses to below £1m, compared with the forecast £4m.

With a growing franchise in Conflict and excitement surrounding Galleon we still think, as we said in December, that the shares will go higher. Buy.

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