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 EisenFingers crossed and I really do mean that but my gut tells me this project will die on the vine like Based Gamer and GamerGate Facts (I think that's what it was called) before it.05/06/2015 - 2:58pm
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Andrew EisenMy opinion (which I'm sure everyone is super duper interested in) is that something like a game site ombudsman could be valuable. It's something that's been suggested before, in fact. Unfortunately, this ain't it.05/06/2015 - 2:56pm
Wonderkarpjust a list showing examples05/06/2015 - 12:44pm
WonderkarpMost Political watchdog group websites will detail those they feel commited bigger injustices. Southern Poverty Law Center is an example.05/06/2015 - 12:41pm
MechaCrashThe fact that a good chunk of the page is made of a hit list is not at ALL creepy.05/06/2015 - 12:01pm
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WonderkarpBrad Wardell article from the past.05/06/2015 - 11:12am
WonderkarpSo this was released...I want to say today. http://deepfreeze.it/ Its a large bit of information pertaining too GamerGate and things involved with it. There's an article on James Fudge, but it just lists that he was a member of Gamejournospros and the05/06/2015 - 11:12am
Andrew EisenAlso, let's keep Age of Ultron spoilers out of the Shout box for a while yet.05/06/2015 - 9:10am
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Infophile@Wonderkarp: The P.T. re-download issue is apparently limited to the US PSN only. Apparently Europe doesn't have this problem. So perhaps this means it'll be fixed.05/06/2015 - 8:20am
IvresseYou're talking about decisions in general. I prefer to judge decisions on a case-by-case basis.05/06/2015 - 8:10am
MattsworknameIvresse, if you weren't doing that already, you haven't been paying attention the last 5 years.05/06/2015 - 5:09am
IvresseRegarding EA, they can give all the estimates they want. However if they then pull a Square Enix and classify it as a failure when they sell 4-5 million copies, then frankly that's when I start questioning EA's decisions...05/06/2015 - 3:18am
MattsworknameAlso, on a less angry note, who here is playing blood borne. I get the impresion the next 5 to 6 months of my life are gonna go to this game.05/06/2015 - 1:39am
Mattsworknameacting like this.05/06/2015 - 1:25am
 

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