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Looking at the company’s balance sheet, it is easy to forget they make games at THQ, Inc. Maybe they just print money. But they do make games, and after charting an 84-percent jump in revenues last quarter, the company known primarily as the holder of numerous flashy licenses--think WWE, Finding Nemo, The Incredibles, among others--is intent on entering the realm where original intellectual property counts for something. They nabbed Red Faction developer Volition, dined on Rainbow Studios, and just completed the buyout of Alex Garden’s Homeworld shop, Relic Entertainment. With 17 teams spread out over eight studios, THQ is bulking up. The car was packed, and the engine was running when we caught up with the company’s head of worldwide marketing, Peter Dille. He spoke with us about what he’s looking for from the company’s outing at E3, and the new direction he and the team are about to take.

GameSpot: Two weeks before E3 you guys delivered some impressive numbers to Wall Street. What’s the mood at THQ heading into E3?

Peter Dille: Really good. We just had a great year and a great quarter, and I think everyone’s really fired up about E3. We feel like we’ve got a great product line. We’re doing a lot of things that people probably don’t expect to see from THQ.

GS: For example?

PD: Three titles that we feel will compete with the best of them in the high-end PC business: S.T.A.L.K.E.R., Dawn of War, and we’ll have Full Spectrum Warrior for the PC later this year. I think we’re entering the show with what is arguably the most anticipated game in the industry right now, which is Full Spectrum Warrior, and the game looks terrific. In the back half, we have titles like The Incredibles, The SpongeBob Movie, Polar Express. The WWE lineup is looking terrific, and we’ve got a WWE game on each of the platforms again. Our handheld business is really going great, and we’ve got two new handheld systems coming out this year from Sony and Nintendo, so there’s a lot to be excited about.

PD: Oh, I left my favorite game out…Destroy All Humans.

GS: What’s the overall message THQ wants to deliver to retailers and to the press at E3?

PD: That THQ has got a very predictable, solid product line that retail can count on. This business, more and more, is about predictability and about shipping things when you say you’re going to, delivering on product quality, etc. Retail really comes to rely on THQ to do what they say that they’re going to do. If a retailer is going to get up and put their money behind The Incredibles, they know they’re going to get what they expect out of that product and that investment.

GS: Predictable sounds so…boring.

PD: Well, I think there are certain things that people associate THQ with because of our history, and we’re looking to turn them around a little bit. For example, we do a great business with the WWE, but that’s not what we’re really focused on at the show. We’ll sell that game in spades, but at E3 you’re going to see some other things from us.

GS: How do the retailers respond to your increased focus on PC product?

PD: I think they’re excited about it, because ,again, they come to know that we do what we say we’re going to do, and it’s a business that we haven’t been in to date, so from that point of view it’s incremental business that they can do with us.

GS: But it’s the PC business so many publishers are getting out of.

PD: Well that might be a bigger theme of the strong getting stronger in this industry. We’ve got an opportunity to invest in areas like that because of the resources that we have, and because of the success of our console business we’re able to make investments in categories that we currently haven’t been targeting.

But this really is a big year for us in the high-end PC, and it’s not by accident that we’ve got these three product offerings, because a couple of years ago we said OK, we want to expand into this segment. Our PC product offerings to date have really been on the family and kid side. We do a very good business on PC, but it largely last year was Finding Nemo. This year The Incredibles will have two PC SKUs, as well as many of our other family brands. But the opportunity to do high-end PC development is intriguing to us not only because it gets us into an incremental revenue stream at the high end, but also when you’re midcycle from a console perspective is really where the more exciting development is going on and where people are really pushing the technology--then we can use that as a ramp-up on the next generation consoles when the time is right to do that.

GS: Do you tailor the message out, one to retailers, one to the press?

PD: They’re very similar. We feel like we’ve got a product line that has something for everyone, a game for all gamers if you will. But I think the other message that we’re going to spend a lot of time talking to the press about--and again, the press oftentimes gets infatuated with the next big thing--is the next generation of consoles, because people like to speculate.

But the fact of the matter is that this is going to be the biggest software year the industry has ever seen, and we don’t want to lose sight of that fact. That’s something we’re very focused on, retail will be very focused on it, and we think it’s a story the press should be focused on as well. When Sony, Microsoft, and Nintendo launch their next-generation machines, that will be the story.

GS: Apart from the speculation, what’s the story now?

PD: Right now, the story is that we’re entering a true mass-market phase of this business, and hardware prices, we believe, will come down this year. Microsoft has already made a move, Sony is waiting to play their hand, and it’s going to generate tremendous enthusiasm in the category and fuel a lot of business on the software side. As a leading publisher, we’re really, really excited about that and that’s the message that we want to get out there.

GS: What does an E3 booth tell you about the competition? What are you sensitive to as you walk the floor?

PD: It’s not just about the booth, because I think anyone can put up a big display. It really comes down to the products that are in them. But I think most importantly, it’s the “buzz,” and it’s what people say about the products that they’ve seen. Last year it was, “That Half-Life demonstration was way cool. It’s worth waiting in line for.” It just takes on a life of its own, and that to me is more of an indication than whether or not they’ve built a waterfall in their booth. And it’s not just the folks walking around, but it’s when we meet with retail and they’ve been to see someone else’s booth, or it's day two of the show and the meetings invariably start with, “So, what are you seeing that’s got you excited?” And you get to hear what other people are seeing.

GS: Over the years has the significance of E3 changed for THQ?

PD: The answer is yes. This is going to be the first year that we’re out on the show floor in a big way. THQ has been at E3 for many years, but we had a display that was a little quieter, it was off the main show floor in Petree Hall, and it served us well. It was a less expensive way to go to E3. We didn’t have to erect a structure. There were already four wall, so that in of itself made it a bit more cost effective.

GS: But now…?

PD: Because of the things I talked about earlier and the initiatives that we’ve undertaken, we’ve made a determination that this is a big year for us and we’re going out on the main show’s floor. You’ll see us right in there between EA and Microsoft in the South Hall.

GS: Any concern about the intensity of The Punisher?

PD: No. It’s something we’re going to have to be mindful of. There are rules and regulations that the Entertainment Software Ratings Board is responsible for, and we fully believe in them. I actually sit on a committee within the ESRB ratings group, so we’re very mindful of it and the product will reflect that. But we see it as an M-rated product and that’s entirely appropriate.

GS: Do you see M-rated products becoming more prevalent in the THQ software library?

PD: We’ve done several M-rated products through the years. Red Faction was M-rated, Evil Dead was M-rated. We’re known for kid’s products, so maybe people forget that we have published M-rated products. But we’re not adverse to a product just because it’s got an M on it.

GS: As THQ commits more and more toward the mobile sector, do you think about how you’re going to marry your core products, especially the core gamers' games to mobile platforms?

PD: We see great synergies between the brand that we manage in the interactive space--a leadership position in the handheld marketplace, which brings with it a certain expertise on how to develop games for handheld devices--and the wireless business. There are some great mass-market brands, and I can rattle off a couple-- Tetris, the Nickelodeon stuff, WWE, etc.--that make perfect sense on wireless devices. The wireless group has also targeted sports as a key driver for their business, and sports is obviously nothing but mass market. So those are the types of things that we think can really help fuel the wireless group.

GS: How big do you think mobile’s going to be?

PD: I don’t think we’re putting any stakes in the ground to say it’s going to be X dollars. But the exciting thing about this business is that if you look at industry projections for what gaming will represent on wireless devices, and even if you discount them by 50 percent, and then we take a nice chunk of that business from our leadership position and our early initiatives in this space, it’s a very interesting and meaningful business.

GS: When you reduce the number of SKUs you put into the retail channel, as you intend to do this current fiscal year, how do you manage to reduce the risk of putting proportionately larger resources into fewer games that still have the possibility of bombing?

PD: I think part of it’s around focus, and if you’re doing fewer things there’s more time to focus on the ones that you are doing. There are more marketing resources to get behind fewer titles, so that you can really make a statement to retail to say this is important to us. Rather than trying to say everything is equal, you’re really getting behind something in a meaningful way.

GS: Where do you see the trend of bringing big-buck, high-profile licenses into the gamespace taking the industry in the next couple of years?

PD: If you’re asking is it one or the other, we believe it’s both. Licenses are still very, very important to this business. We believe that we’re working with some of the best in the business--people that create content and characters in stories. Pixar, Disney, Warner Brothers, Nickelodeon, WWE--all major, major brands. At the same time, we’re also focused on creating original experiences from our own Intellectual Property. Full Spectrum Warrior we think is a really exciting property, Destroy All Humans! is one that we’re really excited to launch here at E3.

GS: How significant do you see the PSP being in the handheld sector?

PD: We like the PSP a lot. The device appears to have some new wireless functionality…we’re very excited about the system.

GS: The DS, is it a long-term or a short-term factor?

PD: Again, we’ve recently received a little bit more information from Nintendo on the DS, and we’re very excited about that system as well.

GS: When you get a chance to roam the floor at E3, what booths do you go to? Whose booths do you visit?

PD: It’s important to see what the guys are doing on the hardware side, what messages they’re bringing forth in terms of how they’re managing their console business and how they’re positioning their products. Like what first-party software they’re going to be using to drive hardware sales--because that’s going to set the tone for what consumers are going after. And then, of course, it’s very important to look around the third-party community.

GS: What’s the buzz going to be this year?

PD: Last year it seemed that every booth had a military game. It remains to be seen what the trend will be this year.