Eidos puts itself up for sale after profits alert

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The Independent Online

The exploits of Lara Croft in her Tomb Raider adventures have not been enough to save the computer games publisher Eidos, which has put itself up for sale. After its shares slipped further yesterday, the company has a market value of £156m.

It has struggled in the computer games market, which is increasingly competitive. Rivals likely to show an interest in Eidos include Sony, Microsoft, Activision and Electronic Arts.

Eidos said it had begun a review of its "strategic alternatives" and would be delaying the publication of ShellShock: Nam 67, its latest video game, until September. "The expected contribution from this rescheduled title will fall into the financial year ending on 30 June 2005 and consequently the company now expects to report a breakeven-to-small loss for the financial year to 30 June 2004," it said.

This is the second time that Eidos has warned on its profits in a matter of weeks. The company said last month that the sales performance of Hitman: Contracts had proved disappointing and would have a negative impact on profits. That announcement sent the shares crashing 35 per cent and the Eidos stock price continued its downtrend yesterday, finishing 3.3 per cent lower at 102p.

The company said the problems besetting the Hitman title had not reversed and that it was caught in a computer games market where scale, diversity and financial strength were becoming ever more important.

"In addition, there is the continuing need to invest more heavily in research and development ahead of the next hardware cycle", the company said.

"These market trends and the changing competitive landscape mean that Eidos is becoming increasingly reliant on the performance of key titles."

The company's board recognised the benefits of scale in reducing the exposure caused by these factors, it said, and had decided to pursue a strategic review to exploit fully the company's intellectual property and development capabilities.