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


 
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Matthew Wilsonthe thing is in japan holidays do not drive sales, and x/y came out everywhere on October 12th last year. This is Nintendo thinking japan is more important than the rest of the world, and that has not been true since the early 2000s.09/14/2014 - 5:49pm
InfophileA glitch in SSB 3DS is causing players to get banned for using Peach: http://www.polygon.com/2014/9/14/6147417/report-glitch-serves-up-one-day-bans-for-smash-bros-players-who-pick09/14/2014 - 4:28pm
Jessy Hart@ZippyDSMlee Hopefully!09/14/2014 - 11:32am
Neeneko@Infophile - as someone who dealt with release schedules, holidays and other releases are just the begining ^_^09/14/2014 - 11:23am
ZippyDSMleeJessy Hart:I am sure they will be back as DLC...09/14/2014 - 10:31am
Jessy HartI miss the Ice Climbers :(09/14/2014 - 9:55am
InfophileSimultaneous worldwide releases aren't as simple as they seem. Different places have different holidays, plus different other releases to contend with. So a little bit of staggering makes business sense09/14/2014 - 3:25am
MaskedPixelantehttp://www.joystiq.com/2014/09/13/excavated-et-cartridges-will-be-sold-distributed-to-museums/ Alamogordo is going to be selling off a bunch of the games from the Atari Graveyard.09/13/2014 - 9:02pm
Matthew Wilsonnintendo should have done a world wide release for smash. The game is all over twitch.09/13/2014 - 12:47pm
ZenYeah, I got a set of codes yesterday and have been enjoying the heck out of it. Limited characters...but it is a demo lol. Glad there is no play limit though which...well...FINALLY. Now, any ideas why it tracks the coins?09/13/2014 - 10:48am
Andrew EisenThe verbiage was "select Platinum members" so yeah, if it's not a random sampling, the other requirements are hidden. Still, everyone gets the demo next week.09/13/2014 - 10:39am
MaskedPixelanteThere appears to be some other factors determining whether or not you get codes. Some people I talked to said they didn't get codes despite meeting all the announced conditions.09/13/2014 - 9:36am
quiknkoldI got Smash Bros Codes!09/13/2014 - 6:42am
InfophileBasically, anyone who got Platinum level on Club Nintendo last year and has e-mails enabled got four codes yesterday (including me) for early demo downloads. Don't know why Nintendo is doing it this way. Maybe they plan more Club perks like this?09/13/2014 - 4:20am
Matthew Wilson@wym I am just hoping they do not screw up their netcode, but given their history I am not holding my breath.09/13/2014 - 12:05am
Andrew EisenThe Smash 4 demo should be available to all 3DS owners on Sept. 19.09/12/2014 - 8:48pm
WymorenceLucky. I've been drooling at that game hoping they can get it to work for a portable since buying my 3DS09/12/2014 - 8:36pm
MaskedPixelanteMan, the way they animate Mega Man in Smash 4 is so accurate to his sprite it's scary.09/12/2014 - 7:28pm
MaskedPixelante3DS version.09/12/2014 - 3:23pm
Wymorence3DS version or WiiU version?09/12/2014 - 3:22pm
 

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