THQ's Farrell Talks Saints Row 2, Pixar Properties

In the analyst call following yesterday's financial results, THQ president and CEO Brian Farrell has commented on issues including PS2 game pricing, Saints Row 2 release date vs. GTA IV, and releasing multiple games based on each Pixar movie. The company said it would continue to be active on PlayStation 2 into 2008, with no current plan to revise its business model, given the console's broad install base. "Not just in the U.S., but in developing markets, there is still a significant opportunity there," Farrell said. THQ also expressed optimism for its WWE-based franchise on the PlayStation 2, based on the enthusiasm of wrestling fans, and indicated the upcoming WWE game on PS2 will not drop in recommended retail price: "With respect to pricing, we believe WWE will command a premium price of $49.99, some of our other titles like Cars: Mater-National at $39.99, and kids' titles at $29.99." Farrell declined major comment on the launch positioning of THQ's upcoming Saints Row title versus Grand Theft Auto IV, or whether the former would be a holiday 2008 title, commenting simply, "We will try to find a proper launch window." He echoed a similar sentiment regarding the company's Ultimate Fighting Championships-based franchise, saying only, "One of the reasons we like controlling the UFC franchise is we can plan it around our other major franchises like WWE." Another interesting issue raised during the call was whether THQ would consider moving into the online gaming and virtual worlds market, given their attention to the kids' markets and the success of other kid-focused online franchises like Club Penguin Farrell indicated the company would not consider that arena. "To compete directly with Club Penguin... I'm not sure what our competitive advantage would be," he said. Farrell continued that the company is pleased with the trends in their digital download business, but allowed, "We think the bigger opportunity has to do with microtransactions and things of that nature, more targeted at the core than casual gamers. The real problem with monetizing casual games is you need to have a subscription or advertising model that works, and we're not a fan of that in the current state. We like the kids' business on console and PC, but don't think of us doing anything like Club Penguin in the near future." Farrell discussed improvements made to the company's structure, process and business models. "We have made some personnel changes at a number of levels we think will strengthen structure," he said. "With respect to how we've modeled [new properties], we take a hard look at the property and the genre, and work closer with marketing and sales, and have planned out a number that we think is appropriate given that it's new." Finally, the company commented on its recent trend of doing multiple, time-staggered games around each Pixar movie. "We try to do a game sequel to each Pixar film," Farrell explained. "The experience is, the unit sales are clearly down a fair amount from the prior version -- but, for example, Incredibles 2: Rise of the Underminer sold well over a million units. They are down considerably from the film launch titles, but still over a million units."