Earnings: THQ Revenue Up 31.7 Percent, Losses up 192 Percent

This story was written by James Quintana Pearce.
THQ (NSDQ: THQI) has released its second quarter earnings, showing a year-on-year increase in revenue of 31.7 percent to $137.6 million, but also an increase in the net loss for the same period of 192 percent to $27.2 million. Sales in Q2 were driven by games based on Pixar movie WALL-E and a new origional Wii title Big Beach Sports, as well as continued strong sales of WWE SmackDown vs. Raw 2008 and MX vs. ATV Untamed.

THQ is betting on a strong line-up of games to get into profit this yearfor this quarter the only one million unit seller was WALL-E, but in the conference call THQ predicted it would have about 6 to 10 one-million unit sellers, mostly big brands or sequels to successful games. Sales of WALL-E are currently slightly below expectations but better than Ratatouille, but THQ thinks it is a very strong brand and expects to sell several million units of it.

THQ has signed a deal with Marvel Entertainment (NYSE: MVL) to publish games based on Marvel Super Hero Squad, and with DreamWorks Animation to publish games on a movie planned for 2010 with the working title Master Mind. It also unveiled UFC 2009 in June, the first title based on the Ultimate Fighting Championship.

In terms of platforms, the biggest mover was the Wii, which increased revenue 268 percent, growing from $6.324 million for Q2 last year to $23.304 million this year. Xbox 360 revenues almost doubled, from $10.347 million in Q207 to $20.129 million in Q208. The GameCube revenues collapsed, going from $4.173 million to $53,000. On the handheld side the Nintendo Dual Screen saw sales increase from $17.624 million in Q207 to $27.290 million in Q208, which offset falls in Gameboy Advance sales ($8.318 million to $1.619 million). Sales for PS3 increased dramatically, but on an absolute basis the revenue was taken from sales of PS2 games.

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By James Quintana Pearce
  • CBSNews

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