UTV Software has reported a profit after tax of Rs. 40.24 crore for the first quarter ended June 30th 2010 (Q1-11), up from the Rs. 31.75 crore loss it reported for the corresponding quarter last year. The improvement in performance is on the back of a substantial increase in Revenue – Rs. 208.2 crore, compared with Rs. 89.8 crore, largely due to an increase in revenue from the motion pictures business. A quarterly comparison is perhaps not justified, since the company is invested heavily in the films and gaming business, where costs tend to be taken on initially, and revenues are often lop sided. In terms of revenue contribution, Movies and TV continued to dominate revenues for UTV:

New Media: Rs. 2.1 Cr Profit; Voice Blogs!

The New Media segment reported revenues of Rs. 5.3 crore, up 89% over the same quarter last year, contributing 3% to UTV’s income. For the quarter, the segment reported a profit of Rs. 20 lakh, compared with a Rs. 2.1 crore loss a quarter ago.

According to a presentation made to analysts, UTV AudioCinema has 1.5 million subscribers, with consumers spending Rs. 3.5 crore per month. Of course, there’s a substantial part of that which remains with the telecom operator and the platform service provider. UTV plans to expand Audio Cinema to 3 more segments. Voice Blogging appears to be working well for UTV New Media as well – according to a recent report in Business Standard, they’re powering many of the celebrity blogs in partnership with Bubble Motion, and have signed exclusive 3 year contracts with many celebrities – Lara Dutta, John Abraham, Neetu Chandra, Cyrus Broacha, Riya Sen, Madhavan and Pooja Gandhi; the highest number of subscribers from Bihar and UP.

In August 2010, UTV New Media also intends to announce “Made for Mobile” content in exclusive partnerships with telecom operators, including creating a movie specifically for the mobile space.

Gaming

UTV’s big bet – the gaming business – reported a marginal increase in revenue to Rs. 12.2 crore from Rs. 11.7 crore in the same quarter last fiscal. The segment contributes 6% of operating revenues. All the gaming companies continue to be loss making, but at least on the console side, there are some major launches planned for the coming year.

Indiagames: Rs. 1.5 Cr Loss For The Quarter

Indiagames, believed to be India’s largest mobile gaming company, reported a loss of Rs. 1.5 crore for the quarter: it launched War Chess, which remains one of the top games on the iPad App Store, IPL Indiagames T20 Fever on iPad, iPhone and online (with a peak of 100,000 users), Bruce Lee Dragon Warrior. It’s games on demand business now reaches 50,000 subscribers, at an ARPU of 150-200 per month. Indiagames plans to do Rs. 50 crore in revenue, and report an EBITDA profit in FY10-11.

Interestingly, Indiagames, which powers games on DTH channel Reliance BIG TV, plans to make two more DTH announcements.

Ignition: Plans To Raise Funds

Ignition, UTV’s console gaming business, plans to explore the option of raising funds, and bring on a strategic partner or investor into the business, which will lead to an equity dilution. The business reported has reported a loss of Rs 1Cr for the quarter, but has a few games being published during the 2010-11 financial year:

Blacklight Tango Down was released on July 7th 2010, and sold 20,000 digital downloads in the first 24 hours. Revenues for the game shall be realized in 2Q this fiscal. UTV is already in negotiations for partnerships for El Shaddai. Apart from El Shaddai, Reich is also set for release this fiscal. War Devil’s release has been pushed by 6-9 months. UTV says it’s “taken opportunity to pace release so as not to offer 3 IPs for pre sale in one year”. The games are sold on a minimum guarantee, by territory, or worldwide. UTV is going multiplatform with its IPs: the games will be on PS3 and XBOX 360, and on other formats and platforms as well, as well as movie production rights, with the script and 45mins of movie quality graphics already. UTVs smaller IPs are expected to cost $1.5 –3 million each.

According to UTVs estimates, they need to reach 1 million units per game to break even – around 165,000 units/ per platform (PS3 & XBOX 360), per 3 main territories (USA/Japan/EU & UK). The company expects Rs. 80 cr from publishing of Ignition games this fiscal.

True Games: Rs. 0.5 Cr Loss For The Quarter

UTV True Games has reported a loss of Rs 0.50 Cr for the quarter. True Games will launch its second game, Mytheon later this year. It has already been licensed by Gamigo for European territories, and is being reviewed in Southeast Asia, and licensing negotiations are in progress for Japan, Taiwan and China. UTV has set up a team in Beijing that is working on an expansion of the game, based on Eastern mythologies. The same team is also expected to release two to four social and casual games per quarter. Additionally, UTV plans to launch two other titles this fiscal – Heaven & Hell and Aerodrome in Q4. It expect the company to be Revenue and EBITDA positive.

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