THQ Confirms Red Faction Sequel, Sees Q1 Sales Dip

THQ has announced that it saw first quarter sales down slightly from $138.8 to $104.5 million on sales of Ratatouille, Cars, and WWE SmackDown! vs. Raw 2007, with quarterly net losses of $9.3 million, down from the previous year's $12.1 million. The company made no change to its fiscal guidance, continuing to expect sales of $240 million in its second quarter, and sales in the range of $1.12 billion to $1.15 billion for its fiscal year. Highlighting recent company news, the publisher noted that it has signed an agreement with Chinese game operator Shanda to bring Company of Heroes to the online market in China in calendar 2008, and that four of its titles -- Company of Heroes: Opposing Fronts, de Blob, Stuntman: Ignition and WWE SmackDown vs. Raw 2008 -- were nominated for Game Critics Best of E3 2007 Awards. The company also noted that it had two new internally developed owned intellectual properties, de Blob and Darksiders, scheduled for release in fiscal 2008 and 2009, respectively, and that downloads for its Stuntman: Ignition Xbox Live demo downloads exceeded 500,000. Said THQ president and CEO Brian Farrell, “Fiscal 2008 is shaping up as we anticipated. Ratatouille is off to a successful start in North America. With five titles based on owned intellectual properties expected to ship more than one million units each and a proven family and casual line-up for the popular Nintendo Wii and DS platforms, we are well positioned for the rest of the year.” [UPDATE: In the company's quarterly earnings call, Farrell confirmed what he had hinted at in February, saying that "today, we are confirming the next Red Faction game," but added no further details on the game or its projected release date. Asked how the company saw July hardware and software sales were sizing up, Farrell said that the recent price cut on PlayStation 3 has "anecdotally... moved the needle on hardware sales," but that the "pickup in software is not quite as high as in hardware." Overall, said Farrell, "the year is shaping up as we anticipated, looks very much like we forecast." Those forecasts called for 4.5 to 5 million Xbox 360s, 6 to 6.5 million Wiis, 3 to 3.5 million PS3s and PS2s, 9.5 to 10 million DSs, and 3.5 to 4 million PSPs sold in the U.S. In Europe, the company expects 2.5 to 3 million Xbox 360s, 4 to 4.65 million Wiis, 3.5 to 4 million PS3s, 4.5 to 5 million PS2s, 8 to 8.5 million DSs, and 3 to 3.5 million PSPs sold. Farrell also discussed the publisher's plans to support in-game advertising, saying that while its first foray into the market will be with three upcoming racing titles, "we're a lot more bullish on the longer term prospects on in game ads overall." He added that plans were underway to support in game ads more broadly, and that more details would be added in the next quarterly call. Farrell said that THQ was still in talks with its licensing partners like Nickelodeon and Pixar to discuss revenue shares of in-game ads in licensed titles, and that "everyone's trying to figure out what the right strategy is," but overall he said THQ executives "love the market, and love the traction there."]