Subject: 3Q 97 vs 3Q 98
Date: Wed, Jul 8, 1998 20:37 EDT
From: HAINESDA
Message-id:
<<Nice to see your enthusiastic old self back, David.>>
"just wait until I get going" a quote out of The Princess Bride
Anyway I want to get back to my favorite passion which is analyst bashing. McGowen just raised his estimate for 2Q as we all saw from 16 cents (which was ridiculously low) to 21 cents which is just low. However he left his 3Q estimate of 23 cents unchanged? You have to be kidding me here? 23 cents??????? Let's just take a look at what THQ released last year 3Q to earn 20 cents on $16.4 million in revenues vs what is scheduled to be released this
year. It will blow your mind. I mean what do the analysts do with all their time anyway..just sit back and say "hey THQ is a neat company so I think it will earn 15% more this year than last year...I give it 23 cents?" Give me a break! (comparison below)
3Q 1997 3Q 1998
Bravo Air Race Playstation WCW/NWO Revenge N64
Brunswick Tour SNES Redjack Revenge PC/Mac
Madden 98 Genesis Bass Tournament PC
Hercules Gameboy Brunswick Circuit PC
Intl. Rally Champ. PC
Devil Dice Playstation
G. Darius Playstation
Intl. Rally Champ. Playstation
Mulan Gameboy
Small Soldiers Gameboy
I mean there is no comparison....first of all last year THQ's only high margin next gen release was Bravo Air Race for Sony Playstation which we all know was slow out of the gates and did little for revenues during the quarter. Brunswick was for Super Nintendo...who cares about a bowling game for a 16 bit game system that was introduced in 1990? Also it was retailed at $54.95 which was so expensive I didn't even buy it. Next was Madden 98 for Sega
Genesis..while Genesis is also an old outdated 16 bit game system first introduced in 1989, this game did sell quite well and made up the majority of the revenues for the quarter. Last was Hercules for Gameboy which bombed at the theatres and didn't sell much better on the video game scene. THQ reported 20 cents last year and blew us all away. Now lets look at this year...whamo...four PC games vs zero last year...remember PC margins are
incredible...cost of cd-roms is $3-$4 vs $9-$11 for Sony Playstation and $35 plus for Nintendo cartridges. Redjack, Bass Tournament, Brunswick, International Rally...any one of these could sell quite well and if they don't, THQ will still make money as they did with Pax. Next we have WCW/NWO Revenge for Nintendo 64...already a proven winner...the original WCW vs NWO sold how many units??? I mean this game is much better, twice as fast gameplay,
better graphics, cage matches, 64 players at once, intros...this game has $$$$ written all over it, could bring in 23 cents all by itself..I am not kidding probably even more, then we have the three Sony Playstation games Devil Dice..a game wildly popular in Japan and one that kept my, LT, and Fender's interest for hours at E3, G. Darius..a game that did little for me but was the favorite of several of the hard core THQ gamers at E3 including the
product quality manager's! International Rally Championship..yeah the racing market is crowded but it is so because racing games sell and lastly the hot Disney movie and the hot Dreamworks movies of the summer...Mulan and Small Soldiers for Nintendo's Gameboy! See what I mean! 23 cents is ridiculous...if I have to borrow against my credit cards from now until 3Q is announced I will but if the analysts don't raise 3Q pretty darn quick they are going
to look as stupid as they have ever been and that is pretty hard to do!
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