Eidos slumps after new warning

EIDOS investors must have felt like the victims in one of its shoot-em-up computer games this morning after a second profit warning in less than a month sent the shares reeling again.

The company, which owns the Lara Croft Tombraider franchise, admitted that the soft market for computer games remained difficult and had not improved ahead of the traditionally quieter summer period.

But there was worse to come as Eidos disclosed that it is to delay the launch of a significant new game, ShellShock: Nam '67. The move, which will hit revenue targets for the coming financial year, again highlighted the extent to which the company is dependent on a few successful games products.

Last month the company revealed that sales of its key Hitman title in the US were below expectations.

Eidos admitted that 'unexpected softness' in the games market, particularly in the US, meant that results in the current year – which runs to the end of June – would also be lower than expected and could even result in a small loss.

Analysts had been expecting a £7.5m pre-tax profit for the year, a figure already extensively revised downwards after May's profit warning before which the City had pencilled in a £19.4m surplus.

The news went down badly in the City where Eidos shares tumbled in early trading, losing 6% of their value within minutes of the market opening.

Eidos said it is to address the issue of its dependence on the performance of key titles by announcing a strategic review.

The Wimbledon-based group, which employs more than 270 people in the UK, said the various options on the table would include looking at how better it can exploit its intellectual property and games development capabilities. The outcome of the review is expected to take place before the publication of full-year results, expected in September.

Last month the company denied it was being stalked by a potential buyer.