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Last Updated: Tuesday, 24 July 2007, 12:49 GMT 13:49 UK
Competition hits Lara Croft firm
Artwork of Lara Croft
Tomb Raider's heroine Lara Croft is back in an anniversary edition
The computer games maker behind the popular Lara Croft adventure has said sales will be hurt by pricing pressure.

SCI Entertainment said it would not pass on 14m of costs to retailers, who are suffering from forced discounting of back catalogue games.

This, it says, is a one-off cost to help retailers bridge the gap between sales to older consoles and the delayed launch of Sony's Playstation 3.

Shares in the firm fell 17.5% as the market questioned its growth prospects.

SCI reassured investors that its core earnings would not be affected for the year to the end of June.

But analysts said the market was digesting the fact that since the upgrade of the Sony, Nintendo and Microsoft consoles, sales of back catalogue games "effectively ran into a brick wall".

With interest rates going higher, game expenditure may also weaken as mortgage payments increase
Simon Denham, Capital Spreads

SCI shares dropped 91 pence to trade at 429 pence in afternoon trade in London.

Tougher trading?

"Revenues going forward will have to depend on new or expensively upgraded games," said Simon Denham, managing director of spread betting firm Capital Spreads.

"With interest rates going higher, game expenditure may also weaken as mortgage payments increase."

SCI, which sells its games under the Eidos Interactive brand, is responsible for the Tomb Raider franchise and PC football management game Championship Manager.

Proving the endurance of Lara Croft's appeal, the London-based firm said it had shipped one million of its latest game - a rewrite of the 11-year-old original - in June, the first month of its launch.

But SCI also noted the increasing importance of online and digital content in addition to the growth of "next generation" consoles as the focus for future revenue streams.


SEE ALSO
Back to the future for Lara Croft
10 May 07 |  Technology
Lara Croft firm swaps bid support
07 Apr 05 |  Business
EA profits slide as gamers wait
04 May 05 |  Business
Bidding war for Lara Croft firm
22 Mar 05 |  Business
Eidos shares shrug off bid hopes
10 Mar 05 |  Business
Eidos shares tumble to record low
09 Mar 05 |  Business

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