Games developer and publisher Empire Interactive collapsed 75% to 2p on a shock profits warning. In a trading update chief executive Ian Higgins warned of wider than forecast losses for the year to December 2002, mainly due to licensing agreement delays with Japanese and other Far Eastern publishers for its current catalogue of PC and console titles. Higgins also explained sales in the key fourth quarter disappointed. Before the news, house broker Altium Capital expected £800,000 of pre-tax losses for the year, with a narrow profit pencilled in for 2003. Despite the warning, Higgins says 2002 sales more than doubled against 2001 and the group had net cash of £2m and a £1m overdraft facility at 31 December. Looking ahead, Empire's key 'Ghost Master' game will come out on the PC in the second quarter of 2003 in Europe and the third quarter in North America, with PS2 and Xbox versions released in quarter four. Driving and shooting game 'Starsky & Hutch' (based on the cult 70's TV show) is close to 'beta' testing and should be released this year on the PC, PS2, Xbox, Nintendo Gamecube and Game Boy Advance. The shares have been marked down on disappointment after disappointment. Avoid.