THQ's Farrell: 'Sometimes We Get Market Value Envy'

Speaking at Gamesbeat 2011, THQ CEO Brian Farrell said that traditional companies need to better communicate their efforts to manage transition in order to stay abreast of highly-valued start-ups in the social and mobile space. Host Dean Takahashi asked Farrell how he feels about THQ, a company operating in the games business for over 20 years, being valued at less than companies that have recently arrived in the industry. "You know, sometimes we do get 'market value envy,' but once you go public you have to understand that someone will always put a value on you whether you like it or not," he said. "The bigger issue is whether or not you are making the transition and whether you are communicating that well enough, and that's why I want to get out and talk about what we are doing. If you've done things right, over time, good things will follow," Farrell added. THQ has split its business into core, casual and mobile/social, but Farrell said the company is building its future on "a digital infrastructure that connects us with every consumer and allows us to have a relationship with every customer." He said the company has a "relentless entrepreneurial spirit" and that each of its divisions are encouraged to behave like "start-ups with agile structures and business models". He added, "We also leverage our advantages by investing in start-ups such as in the mobile space." Farrell said that success in mobile and free-to-play is dependent on creating a "wide funnel" which allows lots of mass market consumers. He said the company had erred in the past by using narrow funnels based on IP with limited appeal outside the core. Asked about the future of dedicated mobile games devices, he argued that consumers have expressed their preference for low-cost, quickly consumable experiences. "Dedicated gaming devices will find an audience but it won't be as broad [as in the past] because of the competition from other mobile platforms."