A brief update on MCZ. In the last month, they have signed a couple significant licensing deals, one for Biowares mass effect, and another which was a renewal with the NBA. The NBA deal is of particular significance, as MCZ should get more out of the deal than last time around, by manufactuering additional accessories (mainly controller and console skins) than they had previously. I hope to see more deals like this announced on a continuing basis, as it is these deals that allow MCZ to create higher margin products.
To reiterate, the main thesis here is that margins will settle at or above their historical levels (25% plus) over the next few quarters, with resumed revenue growth. Deals such as these are good steps, but ultimately Q4 earnings will be crucial to get a sense of where margins will fall going forward. Until then, its wait and see for me.
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