THQ Predicts Lower Sales for Q3, Blames uDraw

December 8, 2011 -

THQ expected that bringing its popular Wii drawing peripheral, uDraw, to other platforms would be lucrative. Earlier this year they announced that the uDraw would be coming to the Xbox 360 and PS3. With the peripheral out and in stores, it looks like THQ isn't getting the kind of returns they expected. The company said yesterday that sales for the third quarter would be down around 25 percent and blames weak sales of the drawing peripheral for the Xbox 360 and the PlayStation 3.

But analysts firms such as Cowan & Company and Wedbush Morgan say that THQ's lower-than-expected sales for the third quarter probably have more to do with other weaknesses in the company's line-up. On Tuesday Cowan & Company downgraded the publisher, but said that the investment community is suggesting bigger problems:

"Our downgrade of THQ shares on Tuesday was motivated by precisely this issue, though the revenue downside was even worse than we had feared," wrote Cowan & Company. "Management blamed poor sales of uDraw on the Xbox 360 and PlayStation 3 for the miss. However, the $130 million revenue downside suggests that there was likely some incremental weakness elsewhere."

Wedbush Morgan's Michael Pachter said that THQ may not achieve its guidance for the full 2012 financial year, making it the fourth year out of the last five that the publisher has posted a loss.

"In our view, the company's remaining release schedule for the quarter apart from Saints Row: The Third and WWE '12 featured many games that failed to generate significant buzz at retail," said Pachter. "Therefore, we believe sales were lower-than expected for many titles in addition to uDraw, due in large part to a pattern of mediocre reviews and a very crowded release slate for the video game industry. Reorders were also likely below expectations as the company's release slate over the first half of the year was pretty thin apart from Warhammer 40,000 Space Marine."

Pachter suggested that THQ's cash balance could "become an issue" in the next financial year saying that its declining licensed and core properties and an unknown release schedule for next year, leaves him unconvinced that Fiscal Year 2013 will be profitable.

"If that is, indeed, the case, the company may face a cash crunch before mid-year 2012, unless it is able to generate solid profits early in its fiscal 2013," said Pachter.

Source: GI.biz


 
Forgot your password?
Username :
Password :

Poll

Whose next half decade of superhero films are you most looking forward to?:

Shout box

You're not permitted to post shouts.
Matthew WilsonRECOMMENDED: OS: Windows 7 Processor: Intel Core2 Duo @ 2.8GHz (or equivalent) Memory: 3 GB RAM Graphics: NVIDIA GeForce GTX 280 (or equivalent) Hard Drive: 25 GB available space10/30/2014 - 5:49pm
Matthew Wilsonhere hare the system requirements. make of ithem what you will. MINIMUM: OS: Windows Vista/Windows 7 Processor: Intel Core2 Duo @ 2.0GHz (or equivalent) Memory: 2 GB RAM Graphics: NVIDIA GeForce GTS 240 (or equivalent) Hard Drive: 25 GB available spa10/30/2014 - 5:48pm
Andrew EisenStill a game I really want to play. Hope it's a solid port.10/30/2014 - 5:42pm
Matthew WilsonValkyria Chronicles pc port needs 25ggb. not bad exept this game came out in 08 on the ps3.10/30/2014 - 4:56pm
james_fudgeEZK: my sarcasm senses are tingling ;)10/30/2014 - 4:21pm
Andrew EisenIf it's any consolation, Xbox owners, Wii U owners don't get the game at all. And if we did, we'd probably never get the DLC.10/30/2014 - 4:19pm
MaskedPixelantehttp://kotaku.com/destinys-new-dlc-kinda-screws-over-xbox-players-1652294153 Sucks when the shoe's on the other foot, huh.10/30/2014 - 4:12pm
E. Zachary KnightSo a vocational school in Oklahoma is being evacuated because someone found a briefcase in the bathroom. Imagine that. A briefcase ina school. That's unpossible.10/30/2014 - 3:33pm
prh99Also, Nintendo wants to watch you sleep..for Science! (*in best Cave Johnson voice) http://arstechnica.com/gaming/2014/10/nintendo-wants-to-watch-you-sleep-for-science/10/30/2014 - 2:47pm
prh99I got it in a Humble Bundle, it's ok but the hype is definitely over blown. Also, only being able dig in the four cardinal directions made for some irksome digging..10/30/2014 - 2:38pm
E. Zachary KnightI enjoyed it. It was very short, but rewarding and fun.10/30/2014 - 2:35pm
Andrew EisenAgainst my better judgement (game looks boring to me), I purchased Steamworld Dig. It's highly praised and it was on sale. Hopefully I'll be wrong about it and think it's as awesome as everyone else.10/30/2014 - 2:09pm
quiknkoldhttp://www.pastemagazine.com/articles/2014/10/femme-doms-of-videogames-bayonetta-doesnt-care-if.html10/30/2014 - 1:15pm
quiknkoldIf he calls himself the Effing Robot King, I can die happy10/30/2014 - 1:14pm
Michael ChandraAlso, yay for him being Ultron. :D10/30/2014 - 1:08pm
Michael Chandra"We become who we are. You can’t judge a book by its cover, but you can by its first few chapters. And most certainly by its last."10/30/2014 - 1:07pm
prh99""We are what we repeatedly do..."10/30/2014 - 12:30pm
Andrew EisenI would, however, call someone who routinely kills time by playing random games on their phone a gamer.10/30/2014 - 12:15pm
E. Zachary KnightMatthew, AE, Yeah, that is why I have a hard time understanding critics of Sarkeesian. I look at her videos as a Feminist review of video games, but for some reason, others look at them as personal attacks.10/30/2014 - 12:01pm
E. Zachary KnightDefinitely a good answer. That is the way I lean. If you actively chose to stop gaming, or just stopped out of habit, then yeah, you are no longer a gamer.10/30/2014 - 11:45am
 

Be Heard - Contact Your Politician