$35 million full-year loss for THQ

Publisher manages to keep string of sales growth years alive, but falls significantly short of original targets.


While the last year was a record-breaking one for the gaming industry as a whole, not everyone came out a winner. In a year-end financial report released today, THQ said it marginally increased total revenues to extend its growth streak to 13 straight years, but the publisher reported more than $35 million in losses for the fiscal 2008 campaign when it expected to turn a profit.

For the 12 months ended March 31, THQ posted sales of $1.03 billion, up a little more than one-third of 1 percent from the previous year. When it began the year, it had expected sales between $1.12 billion and $1.15 billion. It also expected to post a profit between $1.34 and $1.44 per share, but instead reported a loss of $.53 per share, totaling $35.3 million.

For just the fourth quarter of its fiscal 2008, THQ likewise posted greater sales but followed up the previous Q4's profit with a net loss. Revenues were up to $187 million from $172.1 million, but the publisher lost $34.5 million for the three months, whereas last year's fourth quarter saw it bring in a net income of $6.5 million.

The publisher suffered a handful of setbacks in the past year. Installments of Stuntman and Juiced underperformed, convincing the publisher to abandon the franchises. The company also canned a number of projects, including the PlayStation 3 edition of Frontlines, and closed its Concrete Games studio.

"In fiscal 2008, we did not achieve our revenue and profit targets and we are taking aggressive steps to ensure that we significantly improve execution in fiscal 2009 and beyond," THQ president and CEO Brian Farrell said in a statement.

Specific steps include improving the quality of THQ's games, offering a "stronger slate of products," and realigning the company's cost structure. In a conference call with investors, executives said they would be reducing the company's global workforce by around 200 in the near term, but hoped to add those jobs back to the headcount and then some by the end of the current fiscal year.

For that current year (the company's fiscal 2009), THQ hopes to return to happier days of hit games and black ink. The publisher believes its upcoming slate of games compares favorably with last year's, spearheaded by titles like Saints Row 2 and Red Faction Guerilla. For the full year, THQ is projecting sales between $1.18 billion and $1.20 billion, and earnings per share between $.95 and $1.05.

In after-hours trading, THQ shares were selling down more than 6 percent to $19 from $20.35.

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