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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E. Zachary KnightSo aside from the supposed Kotaku/Quinn relationship, do you have a specific example of said lack of disclosure?10/02/2014 - 9:36am
prh99#gamergate renamed #butthurtfarce10/02/2014 - 9:31am
Sleakerwhat the message that they are actually trying to convey is.10/02/2014 - 9:30am
Sleakerthe fault of the journalist? If a large number of people read these articles and all came to the same conclusion that Gamers were being attacked by journalists as a whole, then it seems the burden of journalists to do a better job of explaining...10/02/2014 - 9:29am
Sleaker@EZK - It's not a surprise that articles came out. The surprise is when journalists fail to disclose relationships as they write about the trends, and the content by which the articles contain. Perhaps a large portion was misinterpreted, but isn't that10/02/2014 - 9:28am
prh99It definitely prolonged it, we wouldn't be hearing about Intel if not for Gamers are over/dead. Just additional wood for the fire.10/02/2014 - 9:23am
E. Zachary KnightConster, which sites associated "ALL" gamers with the harassment?10/02/2014 - 9:22am
E. Zachary KnightIs it really a surprise that 15 news sites responed to a very loud and very public shaming campaign against a woman critic of sexism and a woman being attacked unjustly because of the words of an ex-boyfriend.10/02/2014 - 9:19am
ConsterSo a bunch of assholes decided to harass people, sites wrote negative articles associating all gamers with said assholes, and people got so angry about the articles they decided to associate themselves with said assholes?10/02/2014 - 9:18am
Sleaker@EZK - I think you're attributing too much there. I think the reality is actually, if 15 news sites didn't alll write coincidentally 'gamers are dead' articles, in response to a very small number of harassment cases, we wouldn't be here.10/02/2014 - 9:10am
E. Zachary KnightSo what you are saying is that gamergate is a reflexive and defensive reaction to jerks and douchebags being told off?10/02/2014 - 9:06am
Sleaker@prh99 - the ZQ stuff was a catalyst, but GG didn't explode until the Gamers are dead articles popped up everywhere, see article 3 in the link I posted.10/02/2014 - 9:04am
prh99The articles by Leigh Alexander and others were in response to what happened to Anita and Quinn and this toxic subset of gamers. 10/02/2014 - 9:02am
E. Zachary KnightSleaker, My timeline puts events in the order that prh99 just laid out. Had Quinn's ex-boyfriend not been an incredible douchebag, we might not be where we are.10/02/2014 - 9:00am
prh99The blog post by Quinn's exboyfriend suggesting she slept with journalists to get favorable reviews was the impetus for #gamergate.10/02/2014 - 8:54am
SleakerTechRaptor seems to do a decent job of breaking down things in it's currently 6-part series: http://techraptor.net/2014/09/23/good-morning-orthodoxy-1/ - and why atleast for him, the whole Media-thing is offensive.10/02/2014 - 8:53am
SleakerSo from all of the articles I've read that give timelines and show tag trends, there's nothing to support GG being about AS or Quinn. These were a minority of people harassing.. The large portion of GG started when the 'Gamers are dead' articles started.10/02/2014 - 8:45am
prh99Btw apparently they've gone as far as creating a GitHub for this Operation Disrespectful Nod. http://bit.ly/1qsbWcq10/02/2014 - 8:44am
Sleakerthey don't consider the issue. This is the consumeristic nature of a market.10/02/2014 - 8:41am
prh99Attacking their integrity and now getting advertisers to pull their ads from those sites.10/02/2014 - 8:40am
 

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