THQ Loses $136.1m in the Year to March 2011, Udraw to X360/PS3
by Jacob Mazel, posted on 03 May 2011 / 2,584 Views
Earnings week for the March 2011 quarter and March 2011 year begins anew this week. Results for THQ have just come in, and they are in generally in line with projections. The company did meet its forecast of $245-$260m in revenue on a non-GAAP basis for the quarter, on revenue of $248.6m. On the other hand, with extra expenses included, revenue on a GAAP basis reached only $124.2m for the March 2011 quarter. THQ had forecast profit of $3.4m to $10.2m for the March 2011 quarter on a non-GAAP basis - and the company had a $10.5m profit by that method of accounting. Using the GAAP method of accounting though, THQ had a $44.1m loss for the quarter. On a non-GAAP basis THQ revenue and profit increased about $50m and $5m respectively from the March 2010 quarter, but on a GAAP basis revenue dropped $75m and profit fell $35m compared to the March 2010 quarter.
For the year to March 2011, THQ revenues were $665.3m, down from $899.1m in the prior year on a GAAP basis. Yearly losses in the March 2011 year were $136.1m, substantially worse than the $9.0m loss in the March 2010 year on a GAAP basis. Profit for the year also fell substantially on a non-GAAP basis.
THQ was pleased with its results, and stated:
"THQ posted strong fourth quarter results primarily driven by the success of Homefront," said THQ President and CEO Brian Farrell. "We have already shipped 2.6 million units, a solid start for this new franchise, which kicks off the strongest pipeline of AAA core games in our history. We also continued to grow the uDraw franchise with the successful international debut of this compelling new tablet. Today, I am pleased to announce that we plan to bring exclusively designed uDraw GameTablets to Microsoft Xbox 360 and Sony PS3 platforms this holiday."
Farrell continued, "We expect to generate significant growth, profitability and cash in fiscal 2012, driven by the latest installments of multi-million unit selling franchises, Saints Row, Red Faction, Warhammer 40,000, MX vs. ATV, UFC, WWE, and uDraw. We are creating a digital ecosystem for each of these games that will continue to keep consumers engaged and generate additional revenue opportunities beyond the initial retail sale. We also continue to aggressively invest in our digital initiatives, including online social and mobile offerings as well as our Warhammer 40,000: Dark Millennium Online MMO."
THQ also provided a breakdown of game revenue by platform for the March 2011 quarter and the March 2011 year.
- Of the $665.258m in revenue generated for the March 2011 year on a GAAP-basis, $220.14m (33.1%) of the revenue was generated on Wii. After that, $128.647m (19.4%) of yearly revenue was generated on X360, $115.970m (17.4%) of revenue was generated on PS3, $97.869m (14.7%) of revenue was generated on DS, $43.231m (6.5%) of revenue was generated on PC, $29.777m (4.5%) of revenue was generated on PSP, $24.194m (3.6%) of revenue was generated on PS2, and the remaining $5.43m (0.8%) of revenue was generated on wireless platforms.
- Compared to the previous fiscal year all platforms fell except for Wii on a GAAP revenue basis ($220.14m from $137.219m). X360 sales dropped from $237m to $129m, PS3 fell from $200m to $116m, PS2 fell from $53m to $24m resulting in overall console revenue falling by $138m - even with Wii jumping by $83m. DS also fell from $142m to $98m, with PSP dropping from $45m to $30m. Wireless fell from $11m to $5m, and PC dropped from $72m to $43m.
- The math works out to about 11m Wii games, 5.4m DS games, 4.3m X360 games, 3.9m PS3 games, 1.6m PSP games, and 1.3m PS2 games sold for the year, based on roughly what THQ would get for each game sold. THQ thus sold 27.5m games in the March 2011 year for Nintendo, Sony, and Microsoft platforms, compared to 34.7m games in the March 2010 year - which is the main reason revenue and profit is down even with the company selling about 3m more Wii games.
- Quarterly trends were similar to yearly trends. In the March 2011 quarter, Wii games were $46.546m of THQ's revenue (37.5%) as without Homefront the company had virtually no titles sell well on the HD platforms in early 2011. X360 revenue was $24.193m (19.5%) for the quarter, PS3 revenue was $16.049m (12.9%), PC revenue was $14.987m (12.1%), DS revenue was $11.969m (9.6%), PSP revenue was $5.495m (4.4%), PS2 revenue was $4.361m (3.5%), and wireless revenue was $637,000 (0.5%).
- THQ revenue dropped substantially in the March 2011 quarter compared to the previous March quarter for most platforms. Wii grew to $47m from $24m, but X360 fell to $24m from $55m, PS2 fell to $4m from $5m, PS3 fell from $46m to $16m, DS fell from $29m to $12m, PSP fell from $7m to $5m, PC fell from $27m to $15m, Wireless fell from $2m to $1m.
- The math for the quarter works out to about 2.4m Wii games sold along with 800,000 X360 games, 670,000 DS games, 530,000 PS3, 260,000 PSP games, and 220,000 PS2 games. Thus THQ sold about 4.9m games for the quarter, down from 6.8m games in the March 2010 quarter.
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