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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Andrew EisenFirst I hear of the Frag Dolls in many years and they're disbanding. http://fragdolls.com/frag-dolls-farewell-2/05/29/2015 - 7:59pm
WonderkarpI'd love a real Conker. the Project Spark thing I am looking at. If they provide atleast 25 hours of original conker crazyness that I dont have to build.....05/29/2015 - 7:55pm
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Andrew EisenKarp - A real Conker game or are you content with that Project Spark thing?05/29/2015 - 7:18pm
Matthew Wilson if they are smart, they hire Hideo Kojima, give him his own studio, and rebew the partnership with Guillermo del Toro.05/29/2015 - 7:04pm
MattsworknameReally hope silent hills gets made, it really deserves to be released, and konami is being stupid riht now so if MS wants to take it, more power to them.05/29/2015 - 6:32pm
Wonderkarp80% complete? Well. If there was ever a reason to make me buy a Xbone, that would be it. That and Conker05/29/2015 - 5:24pm
Matthew Wilsonif true, a very smart move.05/29/2015 - 5:24pm
Adam802Huge if true: http://www.ign.com/articles/2015/05/29/silent-hills-reportedly-an-xbox-one-exclusive?abthid=5568e08e738dff6a4f00002305/29/2015 - 5:19pm
WonderkarpRegion locking annoys me. I cant tell you how many Japanese games I want to to play but need to own another console and learn japanese to play them!05/29/2015 - 5:13pm
MattsworknameThis kinda thing is why I have a very negitive view on things like region locking and games not being released universially. it creates problems like this where the game gets reduced as a result .05/29/2015 - 4:41pm
Andrew EisenNeither will the 3DS. Wait, WHAT?! http://www.siliconera.com/2015/05/28/samurai-warriors-chronicles-3-does-not-include-nintendo-costumes-in-the-west/05/29/2015 - 4:33pm
Andrew EisenSamurai Warriors Chronicles 3 will not include the Nintendo-themed costumes when it hits the Vita in NA and EU next month.05/29/2015 - 4:32pm
Wonderkarpthe brilliance of the Wii U is they could offer 2 games in 1 package. Tablet/pro controller controls, and then a flipped game with WiiMote. Add a master quest too it too05/29/2015 - 4:18pm
Andrew EisenTwilight Princess would be my favorite if it didn't have a few notable design issues. But yeah, those few things aside, it absolutely trumps Ocarina in most every way.05/29/2015 - 4:11pm
WonderkarpTwilight Princess is my favorite Zelda. Its a legit sequal to Ocarina, enhancing everything Ocarina had, and I hope there's a HD Remaster with gamecube controls. Make it Nintendur!05/29/2015 - 4:08pm
 

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