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

To: Todd D. Wiener who wrote (6082)	6/16/1998 1:37:00 AM
From: Joe Btfsplk	Respond to of 14266

More info from the AOL MF board: Subject: Meeting From: tseltzer@aol.com (TSeltzer) Date: 15 Jun 1998 23:04:04 EDT Thanks to Jan and Rick for the great summaries. I'll add a few of my own comments regarding the meeting but try not to repeat too much. Overall Impression: I thought Brian was pretty smooth, but I had the sense that he's not that used to "running" one of these meetings yet. It's hardly surprising. He's pretty young and hasn't been at the helm that long. In particular, though, I thought he did an excellent job handling the question about whether $3.00 per share was a good estimate. Just my impression, but with THQ's lawyers sitting in the front row, he could give only one response: He definitely had to send the message that THQ was not giving comfort on $3.00 per share. If THQ makes $3.00/share this year, then great. If they don't, however, we won't see a securities fraud lawsuit based on overly optimistic comments at the shareholders meeting. I thought he handled this question very well. Most of the remaining comments are not so significant, since Jan and Rick already covered the high points very well: 1. Redjack and GameFX: Brian seemed very excited about Redjack's prospects. He joked that he thought about buying it himself. Game will be released in August. (The Redjack demo or commercial or whatever it was looked excellent.) He also was very, very happy with the GameFX acquisition, commenting that games on next generation platforms will all be 3D and that GameFX will thus help with all platforms. 2. Price of PC Games: My notes reflect that Brian said THQ intends to price PC games at $29.99 initially. This seems a bit cheap. Do any of the other attendees recall this? (It was discussed at the end of the meeting.) 3. Cash: THQ's cash balance has gone to about $25 million. 4. Color Gameboy: THQ is working hard to get "A Bug's Life" ready for the end of the year for the color Gameboy. 5. Quest Sales: Very preliminary reports are that Quest sales are "very, very good." 6. Rugrats: Reiterated that Sony will underwrite some Rugrats marketing. 7. WCW Sales In Japan: I thought Brian mentioned that THQ has received a "modest royalty" for WCW sales in Japan, which would indicate that someone else is distributing it over there. This would make sense -- since THQ imports so many of its titles from Japan, it is likely that a Japanese partner is distributing the game. I could have misread the comment, though. 8. Foreign Sales: By the end of 1999, THQ wants > 40% of its sales to be from the international market. Brian made it seem like this might be overly optimistic, but this is the goal the company has set. 9. Quest Shipment: One attendee asked many questions about Quest, implying that it was sold out everywhere across the country. Brian politely disagreed, deferring to THQ's internal personnel (Ms Locke) and her read on sell-thru and shipment. There followed many additional questions from this same person -- all implying that THQ had seriously undershipped. Usually, Brian was not allowed to finish his response before the questioner interrupted again with more along the same line, but Brian closed the issue by saying that there was one sure way to go wrong in the video games industry, and that is to over-ship and be forced to take markdowns. 10. Advertising: I asked about television support for Quest and Granstream. As Rick reported, Brian said no TV advertising for Granstream. I agree that he seemed a bit disappointed that they were not doing this. Brian implied that the demographics for the Playstation market would render advertising unnecessary for this RPG, perhaps because word-of-mouth spreads faster among the older Playstation customers. I'm not sure why THQ couldn't advertise two RPGs simultaneously, but that was another comment re why no TV. 11. Personal Comment: Although I personally thought the Quest shipment issue was overdone at the meeting, I agree that it is an issue. Brian said it takes six weeks from the time Nintendo cartridges are "re-ordered" until THQ gets them. If Quest is only 1/2 sold out now with all the pre-orders and sales to other RPGers who were anxiously awaiting the release, what will the television advertising do? The only thing wrong with a sellout is that the company could have sold more. In this instance, we may lose some sales to people who just rent it from BlockBuster for a week straight because there are none left on the shelves. Nonetheless, I will defer to THQ's judgment on this issue -- they've earned my respect. Sorry -- not that much of significance compared to what Jan and Rick reported, but that's the remainder of my notes. Es todo. TSeltzer