The Failure of THQ’s UDraw HD Detailed

If you are wondering just how bad uDraw's sales hurt the company, then you need look no further than EA's results released today. During a conference call today to discuss its latest results, CFO Paul Pucino revealed that sales of the PlayStation 3 and Xbox 360 versions of THQ's uDraw tablet were $100 million below the publisher's expectations. He also said that 1.4 million units of the peripheral are sitting in warehouses collecting dust.

"Where that $100m comes from is we have about 1.4 million units still in inventory that we haven't sold that we planned on selling," said Pucino. "If you think about an average price of about $56 or so, that accounted for a shortfall of about $80 million."

"Then the million or so units that we did sell-in we had to sell at a lower price. That, coupled with software sales that are associated with uDraw being lower as well, totals about $100 million," he continued. "From a contribution margin perspective, we would have doubled the profitability in the quarter were it not for uDraw. So it was something in excess of $30 million in operating loss in the quarter as a result of uDraw."

THQ announced a loss of $55.9 million for the quarter. The division responsible for the device, Play THQ, was gutted in December. The company announced today that it plans to cut 240 more employees during the year.

Source: Eurogamer

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