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Losses Continue In THQ Q1 Despite Wall-E Sales Bump

THQ has announced the results of its first quarter, showing sales up to $137.6 million driven by its Wall-E titles and Wii exclusive Big Beach Sports, but still saw Q1 losses up nearly three times over the year prior to $27.2 million. [UP
THQ has announced the results of its first quarter, showing sales up to $137.6 million driven by its Wall-E titles and Wii exclusive Big Beach Sports, with losses up nearly three times over the year prior to $27.2 million. The publisher says that during the quarter it shipped over one million cross-platform units of Wall-E. Sales were up from $104.5 million in 2007, with losses of $9.3 million. Looking forward, THQ says it expects sales of between $1.15 and $1.17 for its full fiscal year, including $160-170 million in its second quarter. In May, the publisher laid out a plan to turn the company around following a "very tough year," including a new greenlight process, testing the waters of microtransaction supported free to play games, and layoffs of some 200 employees. In its latest statement, CEO Brian Farrell said THQ "continued to make progress against our key initiatives during the first quarter," first by "beginning to roll out a strong slate of games for the year, including a balance of both owned intellectual properties and major licenses." Farrell also said THQ was "making important improvements in our creative development organization, which we believe will increase our product quality and competitiveness. During the quarter, we also took steps to re-align our cost structure and we remain on track to generate improved operating leverage." "We are focused on generating growth at both the top and bottom line, and delivering improved value for our shareholders," he concluded, adding, "Our fiscal 2009 product line-up and long-term product pipeline are well-positioned to take advantage of the expanding demographic of gamers on the growing installed base of game platforms." [UPDATE: In a call with investors, Farrell stressed that while Wall-E didn't meet the same expectations that the company had set, it had outperformed Ratatouille, THQ's last Pixar license. Farrell said that in meeting with games retailers, many were "disappointed about the lack of other consumer products around the Wall-E launch," as an explanation for sluggish sales. He added that he believed Disney was "gearing up for pretty strong promotion around the DVD launch" this holiday, where sales might be more brisk, and anticipated total sales of a least "several million units." Farrell was asked about the performance comparison between its key quarterly Wii releases, Battle of the Bands and Big Beach Sports, the latter of which he called an "unmitigated success," particularly in Europe where it has sold "several hundred thousand" copies. Farrell said that Big Beach proved that "if you have a title in a budget range that delivers quality for money, you can sell a lot of units." But, on Battle of the Bands, it was by comparison "a difficult game to communicate," and, despite its TV ad buy-in, he added that he "wished we had launched that at a budget price."]

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