THQ Likes 3D Stereoscopic Gaming, But Sees Obstacles, CEO Says
"We like” stereoscopic 3D games, because “there’s some neat things we see” possible with that technology, THQ CEO Brian Farrell said on an earnings call Wednesday. But “two things” are needed to make stereoscopic 3D games viable, he said. “We do need some additional console technology … but more importantly, and probably a little further out,” an increase in the “installed base” of 3D TVs and monitors, he said.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Farrell didn’t elaborate on the lack of adequate console technology that would support state-of-the-art stereoscopic 3D gaming. David Coombes, Sony Computer Entertainment America’s platform research manager for developer support, recently rejected claims by some speakers at the 3D Gaming Summit in Universal City, Calif., that the PS3 lacks the power to handle the most complex 3D games (CED April 23 p2). Phil Eisler, general manager of 3D Vision at Nvidia, had predicted it would be “a challenge” for Sony to offer games like that, adding, “I think they'll have to make some trade-offs in terms of resolution” (CED April 22 p1). Eisler and Epic Games Vice President Mark Rein predicted no consoles will run the most complex 3D games until the next product cycle. They said Sony and Microsoft, which has been silent on its 3D plans, will be forced to compromise the frame rates of games to add 3D. The Wii wouldn’t be powerful enough to run any complex game in 3D, Eisler said. The lack of adequate horsepower on the current consoles will give the console manufacturers a big push to introduce next-generation systems, Rein said. Sony will soon make a PS3 firmware update to the console that it said will enable stereoscopic 3D gaming.
THQ thinks 3D will “be a part of gaming going forward, but obviously watch the ramp in 3D-equipped” TVs, he said. Farrell predicted the market “won’t be meaningful for a couple of years."
The overall European game market, meanwhile, continues to be challenging, Farrell said. “We continue to see weakness in Spain” especially, where there’s still a “very high” unemployment rate, he said. The U.K. is “sort of muddling through” with game sales, he said, citing Chart Track data showing industry sales were down about 9.6 percent year to date. The decline has been “a little more than we would like,” he said. THQ, however, has “very little exposure” in Greece, Farrell said.
Farrell again declined to give specifics on THQ’s plans for games supporting the coming PlayStation Move and “Project Natal” motion control systems for the PS3 and Xbox 360, launching later this year by Sony Computer Entertainment and Microsoft. THQ wants to unveil its plans at E3 in Los Angeles, June 15-17, he said. THQ is “still deliberating internally” on pricing for games using those motion control systems, he said. “We're going to watch what’s going in the market for the next several months,” and “we may or may not even announce those launch prices [until] much closer to the launch,” he said. THQ has no plans to port games that don’t use the new motion control systems to Move or Natal, he said, stressing the importance of releasing games unique to those systems.
THQ will unveil a new World Wrestling Entertainment (WWE) brand extension at E3 also, Farrell said. Farrell said he was “pleased” with reorders of its recent release UFC 2009 Undisputed. THQ shipped almost 4 million units of that title and the same number of units for WWE SmackDown vs. Raw 2010 in fiscal 2010, it said (CED May 6 p6). The company will launch two free-to-play, micro-transaction-based games in fiscal 2011 ending March 31, 2011: Company of Heroes Online in North America and South Korea, and WWE SmackDown vs. Raw Online in South Korea, he said.
THQ expects to “double” its digital game sales over the next couple of years and then double it again in the year after that, Farrell said. The company will launch its first “digital core games” this year for Facebook, the PlayStation Network and Xbox Live Arcade, it said. It released 40 new titles in fiscal 2010 and that number will slip to 30-35 this fiscal year, Chief Financial Officer Paul Pucino said. But he said the number of SKUs will increase from 72 to 75-80.
THQ is “ramping up” its Montreal development studio this year and expects “to see significant cost savings” from making games there, said Pucino. But he said, “We're probably a couple of years away” from releasing games at a lower cost from that studio.
Strong demand for the new game releases Darksiders and Metro 2033 drove improved sales for THQ in Q4 ended March 31, the company said. The PC version of the latter title was made compatible for stereoscopic 3D, but THQ didn’t play up that angle in its marketing of the game. THQ sales rose 16 percent from Q4 last year to $197.7 million. The publisher narrowed its loss to $10.4 million, 15 cents per share, from $96.9 million, $1.44 per share. For the year, sales rose 8 percent to $899.1 million and the loss narrowed to $9 million, 13 cents per share, from $431.1 million, $6.45 per share.