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Technology Stocks : THQ,Inc. (THQI) -- Ignore unavailable to you. Want to Upgrade?

To: Marc Newman who wrote (13375)	2/14/2000 1:49:00 AM
From: Marc Newman	Respond to of 14266

Some of the following may be of use. The Wrestlemania carts are right at the high end of Nintendo production costs. Ie, $23 a piece. The royalty to JAKK pretty much works out to 9% of the wholesale price, with a $4.4 million a year guarantee. DLJ sees the wholesale price of WM2K as $42. All in all, a pretty nice royalty stream for JAKK. My estimate is that including a payment from AKLM, JAKK might see $.17 after tax from the JV just in Q4. THQ's estimates remain conservative and also only include minimal reorders. Management does see upside to Q1 and Q2 from the numbers given analysts. Ie, if WWF games do well look for a good quarter. I believe we will see Q2 estimates raised by the end of March. I also think that a falloff in software sales is going to be counterbalanced by a lack of competition, especially on the Nintendo side. I would expect that THQ's deal with EA will get even better, though I only have past history to go on. This could be quite lucrative considering the huge installed bases. Ie, so what if the N64 football market gets down to 350 K in 2001 if we have the only game out there and it's the number one brand (Madden). And as my previous post indicates, until someone else gets the Harry Potter videogame license I think THQ is right in there as a viable option. For some reason, I don't think HAS or MAT are going to get the games. Marc