Strong Initial Sales of uDraw Games Reported at THQ

THQ was pleased with the sale of software for the uDraw GameTablet, with more than 500,000 copies shipped in Q3 ended Dec. 31, CEO Brian Farrell said in a Wednesday earnings call. The company “experienced strong sellthrough at retail” on its uDraw GameTablet accessory for the Wii in Q3, he said. It had said earlier that it shipped 1.2 million GameTablets in Q3 (CED Feb 3 p9), but didn’t say how many sold through.

"Due to the strong demand” for uDraw in the quarter, Chief Financial Officer Paul Pucino said, “We airfreighted additional shipments into North America that were originally scheduled for Q4.” As a result, it expects to ship fewer uDraw units in Q4 than previously projected, he said, but “the total forecasted units shipments for” this fiscal year “have increased from 1.3 million units to about 1.7 million units.”

Half of the reason THQ lowered its Q4 forecast was because of a delay in the release of the game UFC Personal Trainer until next fiscal year, Pucino said. It will be released in Q1, he said. But the lower estimate was also the result of the weaker uDraw shipment forecast and “continued weakness in” THQ’s kids game business, he said. The company now expects to report sales of $245 million-$265 million and earnings per share of 5-15 cents for Q4, down from its prior estimates of $295 million-$310 million revenue and earnings per share of 35-45 cents, it said. THQ shares fell 9 percent to $5.83 in Thursday trading.

Due to the weak performance of THQ’s kids games based on movies, its Kids, Family and Casual division is “increasing its focus on popular new play patterns and devices such as Kinect for Xbox 360, PlayStation Move, the uDraw GameTablet and Nintendo 3DS, with a strong … line-up scheduled for these platforms” next fiscal year, it said. The division will also focus on “online network games and games for mobile devices,” it said.

The THQ executives didn’t say how many uDraw game titles will ship this year. Farrell offered more specifics on its plans for the new Microsoft and Sony Computer Entertainment motion-sensing systems, saying THQ has “over a half a dozen titles coming” for the Kinect and PlayStation Move combined this year.

THQ has been “approached by a few people” about uDraw licensing opportunities, Farrell said. “But the real driver” for uDraw “is hardware and software for us” due largely to the “high margin” on the products, he said.

The results that THQ reported for Q3 topped its forecast “due to strong sales” of its new uDraw GameTablet for the Wii, the publisher said. But THQ said revenue fell to $314.6 million from $356.7 million in Q3 the prior year. It also swung to a $14.9 million loss from a $542,000 profit. THQ will ship the uDraw GameTablet in markets outside North America in the March quarter, it said.

Separately, THQ said Thursday it launched the game UFC Undisputed Fight Nation on Facebook. It’s “the first official Facebook game based on” the mixed martial arts organization Ultimate Fighting Championship, THQ said. The game was developed for it by Embassy Interactive.