THQ Reduces Q1 Losses, Reconfirms New Red Faction

THQ reported a net loss of $9.274 million today for the first quarter of fiscal year 2008, down from a $12.101 million net loss during the same period last year. Net sales decreased for the quarter by 24.7% to $104.5 million, with most revenue coming from more than one million unit sales of Disney/Pixar's Ratatouille (PC, PS2, PS3, Xbox, X360, GCN, Wii, NDS, GBA) from Heavy Iron Studios. "We expect this game to have an extremely 'long tail' and strong international appeal, just like Finding Nemo," CEO Brian Farrell jested during an earnings conference call. During the same call, Farrell mentioned again that development of a new game in the Red Faction shooter franchise would continue. "Today, we are confirming the next Red Faction game," he said. Farrell had already referenced a new Red Faction title in a conference call earlier this year. The quarter's net losses are in line with THQ's estimates, with strong sales in the second half expected to bring revenues for fiscal year 2008 to between $1.12 billion and $1.15 billion. "Q4 net sales should be up approximately 60 percent versus last year, led by the multiplatform launches of Frontlines on three platforms, Destroy All Humans on five platforms, and a strong Wii and DS title, de Blob," said CFO Edward Zinser. "This compares to two PC titles in the fourth quarter of fiscal year 2007." Responding to an analyst's question on how the holiday's heavily anticipated titles would affect THQ's sales, Farrell reiterated his company's niche. "While some people are coming at the market with Halo and Grand Theft Auto, we're coming with WWE, Pixar and Nickelodeon--not products that are directly competitive."