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THQ AŞ Message Board

  • srayma78 Feb 8, 2011 11:12 PM Flag

    TTWO earnings THQI stacks up and thoughts...

    In response to the earlier conversation regarding TTWO and THQI it could be said both have good licenses and both have "hits" depending on how you quantify a "hit". It could also be said that TTWO is the gaming stock of today and gaining momentum while THQI is building for tomorrow both with IP and stealing talent throughout the industry. THQI did also swipe UFC from TTWO if you forget that major swap which was game changing for THQI. They have both weathered big storms where other publishers have crumbled like Midway, Acclaim, Atari, and a host of other big studios bought and shuttered like Pandemic which ERTS purchased for big money. The industry moves at light speed and THQ has tried to renew their focus and i commend them for the effort and TTWO has alot to be proud of also and is eating the competitions lunch right now.

    THQI has it's best lineup in 2011 and has yet to see any of those licenses bear fruit.

    TTWO had been subjected to the same scrutiny as THQI by analysts it's just that they removed all the roadblocks over the last few years which for awhile.

    Alot of game makers seemed to have a black cloud above their heads and it doesn't take much once the wall of doubt is removed and a few good things align.

    Considering the issues TTWO had and overcame and the little THQ has left and now looks to have finally put themselves in a position to make the same strides TTWO did over the last 12 months i'd be not willing to bet against them.

    They are both winners and have maintained that few over the last year.

    Eventually like with TTWO you have no bad news or the bad news is met with no more sellers.

    THQI had some sellers still here otherwise it'd be back at $6.50 or above. TTWO making new 52 week highs daily lately and in AH so that tells me it's obviously the buyers choice.

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    • srayma78 Feb 9, 2011 12:11 PM Flag

      Well i think it's obvious a question of can they execute.

      The mistakes made in the industry as a whole has been a comedy of errors in recent years. Any publisher can look at themselves and if they took a positive from the negative and made themselves immune to that problem again they are better for it.

      You know TTWO had a mountain of worry and doubt to overcome and did. Rockstar is a fantastic studio.

      THQI is no TTWO that's obvious and i don't think 200% premium is much considering all the other players that have been acquired and the prices paid. Not to mention that if somehow in acquistion the UFC license is worked out to where the acquiring Company is allowed to continue their publishing deal with Zuffa that alone makes a transaction immediately worth quite a bit more than if it was to be null and void.

      This business changes daily so tomorrow it could be that Zynga and the other social media flavors of the day are tomorrow's bust as today they are being compared with ERTS despite no catalog of games and built up business and perhaps THQ is a Top 3 publisher this year and does gain interest as they prove themselves.

      It will be exciting nonetheless to see how the industry does in the next 12 months. I think YOY comparisons for alot of publishers are not that hard to beat and alot of good games coming out all year long. Even Warner Bros Mortal Kombat coming out next month looks real good. When is the last time anyone was excited for an MK game?

    • "Company of Heroes Online never really looked like a game that was going anywhere."

      Shouldn't this supposedly excellent management have noticed that before hyping it and finishing it? It's not just the financial cost, it's also the opportunity cost of an internal developer tied up in something unproductive for so long.

      "I dunno seems to me like you are betting this to go the way of Acclaim or Midway."

      No position ATM so I'm not "betting" on it, but to avoid that eventual fate they'll need a strong internal IP, 5M+ minimum and preferably higher, something they have zero track record of doing (unlike Rockstar). Or something with strong recurring revenues in the social/digital space. Anything less and they're treading water, likely burning cash and downsizing along the way, hoping to buy more time (and keep paying their own execs salaries). Closing studios just means the survivors need to be even more profitable than previously hoped, to cover the G&A overhead.

      Can they truly turn it around? Maybe. Plenty of people have been burned betting on TTWO's imminent demise over the years and GTA and Red Dead confounded them. They desperately need a big hit like TTWO has though.

      I don't think they're going bankrupt in the next few years so they have some time, nor do I think they'll be acquired to save them. The other big publishers won't even greenlight games that sell in the amounts of THQ IP, never mind acquire them for a premium! Big media is pulling away from core games, as in Viacom and Disney. Recent acquisitions have been for companies with strong recurring social/digital revenue and social networks, neither of which applies to THQ. Nobody wanted to buy Midway until it was given away. Same with Eidos. So IMO you're dreaming talking about a 200% buyout premium.

      I'm skeptical of ERTS GAAP/non-GAAP games, and endless restructuring. To their credit though, at least they expense as they go so the delaying of decisions to cancel or change direction on projects has a current impact on earnings and therefore real consequences. THQ tries to pretend these many "one time" issues are not indicative of management performance. IMO they are.

    • """It's been a painful time for a THQ shareholder who bought from January 2008 at near $30 a share to nearly 3 years later being $5.5o """"

      99% of those shareholders bailed at some point, if they held, boy do they have patience in which might pay off in about two more years

    • srayma78 Feb 9, 2011 11:08 AM Flag

      I don't know if you are getting a bit too over analytical here but Company of Heroes Online never really looked like a game that was going anywhere.

      It's been a painful time for a THQ shareholder who bought from January 2008 at near $30 a share to nearly 3 years later being $5.5o but they've been on a diet and trimming the fat. If they are cutting projects that won't make a difference and they are saving money by not pouring more into it i will be happy to hear it.

      You can go down the line between all the publishers and their balance sheets and point out X amount of intangibles that if you took them into account would make the Company look different. Was it me or did ERTS lose half a billion dollars this Q alone when taking in either non-GAAP or GAAP #'s? Doesn't TTWO have a good amount of shareholder expenses each Q? Doesn't ATVI have a plethora of stuff if we put a microscope to that we can try and make your points.

      I dunno seems to me like you are betting this to go the way of Acclaim or Midway.

      I find they've done alot here that in the next few months their plan will immediately bear fruit. If this first 6 months here doesn't produce then i can see why the stock is stuck at $5.5o when TTWO's moved up $7 since last year and this one has stayed relatively flat. I think it's a combination of the Company burning themselves by not setting the bar low and disappointing and the Street being down on the sector until recently. That seems to have changed a bit with sentiment and now it's up to them to execute the next 6 months.

      They burned alot of fat and got lean it took some time but they are in much better shape today than 12 months ago and $3 cheaper. Anyone you slice it at $337 million market cap no publisher could come in with the IP and licenses and pay any less than a billion here. They could easily fetch $12 a share if they wanted to sell this thing. That is peanuts when you factor in what companies have paid over the last 24 months for gaming related companies.

    • What do these mean? I'm aware of the Ubi guy they hired for their Montreal studio. Who else?

      "stealing talent throughout the industry."

      and in what way did they swipe it from TTWO? I've never seen TTWO mentioned anywhere near this recent licensing deal. Anyway, you know if they're in competition for a license that's only going to jack up their costs to get it, right?

      "THQI did also swipe UFC from TTWO"

      • 1 Reply to jesterbunk
      • srayma78 Feb 8, 2011 11:58 PM Flag

        TTWO made UFC games for a few years:

        So it wasn't necessarily swiped but lost by TTWO before they could make it what THQ did. UFC and THQI is done deal for 8 years. UFC left TTWO years ago after making some real poor titles. It was only when THQ took over it was made into a title that generated sales better than any MMA game along with the fact ERTS MMA game absolutely flopped compared to UFC. Dana White showed his appreciation for what THQI has done and 8 more years is now what THQI can work with while UFC's global strategy continues.

        A mention of the talent acquired by THQ was referenced in the Rbbinson article (i guess along with the Ubi guy they did get a few more of the AC team also & Tim Schafer as well, alot of Kaos also came from DICE) along with a mention that THQ was within one point of obtaining Infinity Ward's services and couldn't agree on them retaining rights.

    • srayma78 Feb 8, 2011 11:19 PM Flag

      I will say that THQI better get the marketing horse back in gear and make a better effort into the launches of both De Blob 2 and Homefront. It's really a shame a demo hasn't surfaced for Homefront and while i appreciate analyst day, etc. the gamer community needs to be the focus as they are the end game. They can rely on quality titles and reviews to drive sales but they are leaving alot of potential sales and buzz on the table by this effort here with 13 days till De Blob 2 and 5 weeks till Homefront. Get on that horse THQ and ride it. WWE All Stars coming March 29th has some great new videos also today on IGN. That is getting better buzz as of late and really looks like it could make a nice splash next Q.

      If Jesterbunk's estimates of Homefront @ 1.5-2.5 million i expect alot of heads to roll and studios to close as a result. Plus the whole morale issue isn't a factor. One guy defected and squaked about being worked hard and you should know this is an industry trend on what he was upset about and interviews showed that Montreal consolidation has been in the cards for awhile.

      The release schedule is lighter than you are projecting also Jester. I laugh at the analyst mentioning moving titles in response to TTWO's titles in May. What should a Company just shutter its doors while its at it because they deem a title competition. Please. He couldn't be more off panicking at the bottom and praising them at the highs now he's just being a total joke. Not to mention he suggested moving a racing title because it is in the same window as a shooter? If Ghost Recon and Deus Ex came out this month as originally expected then it would make sense for THQ to be worried about release dates. The other option is going against those 2 titles PLUS the Nov next Call of Duty release and Battlefield 3.

      The pendulum swings heavy when you are percieved to not being able to meet #'s and i believe based on finally getting it they've adjusted numbers to reflect a worse case scenerio. Perhaps they don't execute with HF and De Blob and those numbers only get met. The more i look at those estimates the less they look any less than worse case.