Shares of video game maker THQ (THQI) are down 17 cents, or 22%, at 59 cents after the company this afternoon reported fiscal Q3 revenue and profit per share below expectations, and outlined some more details of a previously announced plan to exit the market for kids video games for console game machines.
Revenue in the three months ended in December rose 25%, year over year, to $404 million on a non-GAAP basis, yielding EPS of 35 cents a share.
Analysts had been modeling $428.8 million and 65 cents a share.
Non-GAAP revenue includes $98.91 million worth of deferred revenue.
The company will exit the development of traditional kids’ licensed console games, it said, a decision it had first disclosed on January 25th. CEO Brian Farrell remarked that sales of “uDraw,” a drawing tablet hardware product, as well as “other titles in the kids, family and casual category were far weaker than anticipated, substantially reducing our financial results for the quarter.”
Absent the kids titles, Farrell said the company will produce a “strong multi-year pipeline of games.� He noted strength in the quarter in games such as “Saints Row: The Third,” an action-adventure setting with mature subject matter, shipping 3.6 million units of the game during the quarter.
The departure from kids games is expected to reduce sales & marketing and product development costs by $160 million annually, the company said.
THQ’s conference call with analysts starts at 5:30 pm, Eastern time, and you can catch the Webcast here.
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