THQ profits up, gamers have cause to celebrate
THQ has recently released their second quarter results, and shareholders should be happy. THQ's quarterly sales have increased by more than 50% from $142.7 million to $240.2 million. The improvement in net income is something to celebrate as well; THQ pulled a $12.6 million profit this quarter compared to a $1.4 million loss last year. While this is nice for anyone holding THQ shares, what does this mean for gamers?
THQ has specifically named Company of Heroes, Metacritic average of 94% and Saint's Row, Metacritic average of 81%, as the key reasons for the boost in income. Gamers should rejoice when a gaming company posts gains in profits on the backs of original software, as opposed to licensed title shovelware. Posting profits on original titles could push further development of new titles.
Do you think THQ's profit boost on fresh ideas will convince other game companies to try the same? Or will THQ's success go ignored, continuing the long standing practice of selling formulaic games for quick profits? THQ did show strong sales with Cars, so until licensed games stop selling, publishers will still place their money in the safe investment.
[Update 1: Big math mistake fixed]
Reader Comments (Page 1 of 1)
crono141 @ Nov 6th 2006 1:33PM
Last time I checked, 240 wasn't "more than double" 143. Perhaps the math changes a bit when "million" is added to the equation? I don't know, I'm not a doctor.
Justin @ Nov 6th 2006 1:40PM
Neither of these games were 'original' in any way. One was a good RTS and the other a GTA clone, both proven formulas
Ash @ Nov 6th 2006 1:42PM
good to know THQ is doing good this gen around..
honestly, last gen... 7 out of every 10 titles released by THQ were crap
Kevin in NYC @ Nov 6th 2006 1:43PM
I agree this is great news. Diversity in gaming is vital to growing this industry's demographic penetration rate.
paul @ Nov 6th 2006 1:44PM
as a first year med student, I will go on record as saying tha 240 mil is almost double 143 mil.
I don't see what is wrong with the Cars game. My 5 year-old nephew loves it and can actually play it. We do need to hook the young gamers for the industry to continue. It does no good to have every game be WWII based or a GTA clone. While I enjoy those games, I certainly won't play them with my nephew around. I would like to see better games, without being stupid, for the younger kids.
Jose @ Nov 6th 2006 1:50PM
THQ is a business before anything, and as such, their main goal is profit. With numbers being what they are, it should be obvious that, although not the easiest, but the most feasible means of turning profit is by publishing (/developing?) original titles (although war FPSs and multi-player gangster GTA clones are a little less than original), not producing mass quantities of licensed (licenses cost mullah too) games which must be developed/published on a certain timeline to be even remotely viable at market. Develop/publish your games from your own ideas and you can delay (almost) as much as you want, as long as the end product is quality. You need to build up a trust with your consumer, and THQ may be doing that with these two titles, and future originals.
Judd @ Nov 6th 2006 2:00PM
"increased by more than 50% from $142.7 million to $240.2 million."
They never said "doubled." A 50% increase of $142.7 million is half of $142.7 million added to $142.7 million, or $214.5 million. It's actually more like a 68% increase, but I think they were fine in saying more than 50%.
"Posting profits on original titles could push further development of new titles."
Nope we're just going to see Saint's Row 2 and Company of Heroes 2.
crono141 @ Nov 6th 2006 2:02PM
Judd, did you see the update.
The original post said "more than doubled".
Way to knee-jerk.
wes @ Nov 6th 2006 2:23PM
The new smackdown is coming out soon so they sould be seeing a even bigger profit coming soon,that game sells like hotcakes every year.
Judd @ Nov 6th 2006 2:25PM
I could've sworn when I saw the post originally I saw it saying 50%, but I did not see it saying [Update 1: Big math mistake fixed]. Nevertheless, I'm sorry.
Adam @ Nov 6th 2006 2:32PM
I used to work at THQ.
They Publish wrestling, brats, cars, the incredibles, spongebob, nickelodeon everything, and warhammer.
They only mention company of heros and saitns row because they are down with the actual gamers. when in fact most of their money comes from the pixar and nickelodeon titles.
THQ is worse than EA when it comes to fresh ideas. They are literally about the bottom line. and if you see how they treat their empolyees...you will see that too.
nick @ Nov 6th 2006 2:41PM
Wow. First time i've seen Saint's Row described as "original". Good game, but most definately a clone.
Dot @ Nov 6th 2006 2:47PM
Well, at least Company of Heroes' sales clearly show that well-made PC games can sell just as many copies as console games.
I hope that sways some of the game developers towards producing more games for the PC.
jcmschwa @ Nov 6th 2006 3:40PM
The profits don't lie. I think other companies will take notice. At the same time, I think publishers will look more at THQ for its new gamplay mechanics than the fact that it created a game around original content. The 1.4 million loss from last year kind of surprises me, actually. Though I guess I don't pay attention to a lot of other crap they may have put out, I think Dawn of War really helped them build their fanbase and CoH capitalized on it. Much of CoH's gameplay is based off of, and improved upon, DoW's new take on resource collecting. Anyone who played DoW knew they were going to buy CoH when it came out. And I think a lot of people who maybe didn't like the W40k universe and didn't want to give it a try jumped on with CoH. CoH maybe got them the profits, but I still think DoW was an important part of that.
je @ Nov 6th 2006 6:15PM
@adam
I too used to work at THQ and can confirm your comment from above. they are a terrible company to work for and maybe the least innovative place I've ever seen. They are followers in the video game market, and their constant stream of crap-games confirm this fact.
Any company that makes its employees talk about EA with jealousy is a terrible place.