In more bad news for the gaming industry, SouthPeak Interactive has reported a loss of $1.3 million for the quarter ending September 30th.

It's an even bleaker picture when you know that for the same three-month period last year, the company reported a $3.5 million income.

Also down were the revenues, dropping $10 million from $18.3 million for the same period last year to $8.4 million this year.

The company has played down its losses however and remained positive, citing its release schedule as a reason for the fluctuating results, and pointing out the Q2 last year saw the release of it's popular Two Worlds title. SouthPeak also mentioned that it had incurred increased costs due to going public this year, and expected its annual results to overall far exceed those in 2008.

"This year's first fiscal quarter has positioned us to have our best holiday pipeline to date and an outstanding second fiscal quarter," said Terry Phillips, chairman of SouthPeak.

"Moreover, we expect our annual results for the fiscal year ending June 30, 2009 to dramatically exceed our fiscal 2008 annual results of USD 40.5 million in revenue and EBITDA, as adjusted, of USD 4.5 million."

SouthPeak's CEO, Melanie Mroz, added: "During our second fiscal quarter, we are launching Legendary, My Baby Boy, My Baby Girl, Ninjatown and Mushroom Men. We built a great deal of momentum coming into our current quarter."

"We are very excited by the strong retail response to our titles and we look forward to having the best holiday season in our history."