THQ CEO: Internet Is '$64K Question' In Video Game Mkt
From the WSJ($) site:
Dow Jones Newswires
NEW YORK -- The Internet may represent the future of video games, but technological problems remain to be addressed, according to THQ Inc. (THQI) Chief Executive Brian Farrell.
"The Internet has been the $64,000 question in our industry," Farrell said in an interview on CNBC Friday. "There has been no business model yet because there's a couple of real problems with the Internet for games currently."
Two such problems are latency, or the time it takes to transmit the directions from joypad controls over the phone lines, and bandwidth, or the ability to download the game or transmit the signals over the line, he said.
"Right now Internet gaming is still a thing of the future," Farrell said. "We have Internet gaming rights for the WWF and perhaps at the end of this term of 10 years that will be the only medium, but for us whatever platform it is, we're happy to be doing wrestling games."
Unlike many other video game software makers, THQ has a history of profitability. It posted net income of $1.35 a share for 1997 and 86 cents for the first quarter.
"We run a very serious financial model, and we run it as a business," Farrell said. "We think our creative people and our marketing people are as strong as anyone in the industry. As a result we have been profitable over the last several years."
He also said the company has been "very successful" with three games, one for the Nintendo 64 and two for the Sony Playstation, based on a World Championship Wrestling license.
But THQ recently signed a 10-year exclusive agreement with Titan Sports to publish World Wrestling Federation electronic games on all platforms beginning late 1999 or early 2000.
"Like many of the wrestlers, we're now switching leagues," Farrell said.
One advantage of the Titan Sports deal, he noted, is its 10-year term, which allows THQ to "continue to sequel the games and get all the new platforms and all the new gaming devices over the next ten years, including the Internet."
The company's products are sold through retailers such as Toys 'R' Us, Wal-Mart and Target. Most of the games are based on properties licensed from third parties.
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