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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IanCBecause that isn't Max Payne 3. It might have the name, but it isn't an entry in the series.12/22/2014 - 12:48pm
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Papa Midnighthttp://arstechnica.com/gaming/2014/12/drm-glitch-leaves-new-max-payne-3-buyers-temporarily-in-the-lurch/12/22/2014 - 11:55am
MaskedPixelantehttp://www.kanzenshuu.com/2014/12/22/j-stars-victory-vs-ps3-ps4-vita-international-plus-version/ J-Stars is coming to North America.12/22/2014 - 9:36am
Matthew Wilsonhttp://www.businessinsider.com/xbox-one-virtual-reality-headset-will-compete-with-oculus-rift-2014-12 can a xbo even handle doing vr?12/21/2014 - 10:48pm
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ZippyDSMleeMaskedPixelante: I'm itching to start it too but I will wait till the patch goes live. >>12/19/2014 - 7:52pm
Adam802Leland Yee and Jackson get trial date: http://sfbay.ca/2014/12/18/leland-yee-keith-jackson-get-trial-date/12/19/2014 - 5:24pm
MaskedPixelanteNevermind. Turns out when they said "the patch is now live", they meant "it's still in beta".12/19/2014 - 5:07pm
MaskedPixelanteSo I bought Dark Souls PC, and it's forcing me to log into GFWL. Did I miss something?12/19/2014 - 5:00pm
Matthew Wilsonhttp://arstechnica.com/tech-policy/2014/12/republicans-may-have-plan-to-save-internet-providers-from-utility-rules/ this is intreasting. congress may put net nutrality in to law to avoid title 2 classification12/19/2014 - 2:45pm
Matthew Wilsonhttp://www.polygon.com/2014/12/19/7421953/bullshit-cards-against-humanity-donated-250k-sunlight-foundation I have to admit I like the choice o organization. congrats to CAH.12/19/2014 - 1:51pm
E. Zachary KnightIf you are downloading a copy in order to bypass the DRM, then you are legally in the wrong. Ethically, if you bought the game, it doesn't matter where you download it in the future.12/19/2014 - 12:06pm
InfophileEZK: Certainly better that way, though not foolproof. Makes me think though: does it count as piracy if you download a game you already paid for, just not from the place you paid for it at? Ethically, I'd say no, but legally, probably yes.12/19/2014 - 11:20am
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ZippyDSMleeMaskedPixelante:And this is why I'm a one legged bandit.12/19/2014 - 10:51am
ZippyDSMleeE. Zachary Knight: I buy what I can as long as I can get cracks for it...then again it I could have gotton Lords of the Fallen for 30 with DLC I would have ><12/19/2014 - 10:50am
MaskedPixelantehttp://www.joystiq.com/2014/12/19/marvel-vs-capcom-origins-leaving-online-storefronts-soon/ Speaking of "last chance to buy", Marvel vs. Capcom Origins is getting delisted from all major storefronts. Behold the wonders of the all digital future.12/19/2014 - 9:59am
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