On GigaMedia Ltd.'s third-quarter results today, Chief Executive Arthur M. Wang said his company is looking to take a majority stake in Infocomm Global Asia Holdings, an affiliate in which it has held a minority interest since 2006.
Infocomm, which offers subscription-based gaming services across Southeastern Asia via the IAH Games portal, has licensing rights to Electronic Arts' FIFA Online 2, a popular game Mr. Wang said GigaMedia would like to have in its sports stable.
"We've worked very closely with IAH as an affiliate company," Mr. Wang, who is a member of Infocomm's board, said on an earnings call this morning. "We've always encouraged IAH to grow and expand as well as they can and always held ourselves out as one possible future for them, and that looks like the way we are going. The timing is most likely to be the beginning of 2009."
For the third quarter, meanwhile, the Taiwan company reported consolidated revenue of $45.7 million, up 16 percent versus last year but down 7 percent, sequentially. Net income came in at $10.7 -- up 22 percent over 2007, down 10 percent on the second quarter -- for an operating margin of 23.5 percent.
Revenue from GigaMedia's gaming software business came in at $34.5 million, to which poker contributed $23.5 million and casino, $11 million. Poker grew 7 percent, year over year, but fell 14 percent, sequentially, while casino grew 51 percent on last year and 15 percent over the previous quarter.
The company said cross-selling -- an industry standard -- helped it achieve record quarterly casino income. Thomas T. Hui, the chief operating officer, said that work on the company's casino-poker platform integration continues on an incremental basis, and that the majority of consumer-facing features have been rolled out.
"A percentage of our active poker value base [has] become our casino players, and that ratio has been gradually going up," Mr. Hui said. "Right now, it's still single-digit, but we think that the growth rate is a healthy one and we think you can go to a healthy double-digit."
Sports betting is anticipated to launch sometime in the fourth quarter and will target Europe.
The company's Asia-facing online games business grew 11 percent to $11.2 million over last year, but slipped 7 percent against the previous quarter.
Revenue from FunTown, a casual gaming portal, came in at $6.2 million -- flat against last year and down 6 percent, sequentially. T2CN, an online sports casual games operator in China, generated income of $4.9 million, up 27 percent over the prior-year period but down 9 percent compared to the second quarter.
Mr. Hui said today that the company has yet to soundly determine whether the sequential loss was due to increased competition in its target markets or macroeconomic uncertainty, or both.
Although the company does not offer specific financial guidance, Mr. Hui said fourth-quarter revenue in the gaming software business has rebounded but at levels lower than during previous years. The Asian online games business is expected to remain flat but increase steadily in 2009 when new games like Holic, NBA Street and Warhammer are launched.
GigaMedia, currently trading on the Nasdaq at $4.23, has lost approximately 78 percent of its share value in the calendar year to date. It has a market capitalization of $229 million.
Chris Krafcik is the editor of IGamingNews. He lives in St. Louis, Mo.