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

To: Todd D. Wiener who wrote (10887)	5/19/1999 3:05:00 PM
From: Todd D. Wiener	Read Replies (1) \| Respond to of 14266

Sure enough: next-generation.com

To: Todd D. Wiener who wrote (10887)	5/20/1999 9:42:00 AM
From: Kory	Read Replies (1) \| Respond to of 14266

Todd, I guess you are disagreeing with me, since I expressed concern about the purchase of PCP&L. But, I did not say that THQ is losing flexibility. I said that THQ is becoming more and more focused on being a developer than a outsourcing publisher, which I am not convinced is a good thing. And while THQ may still be among the "lightest" companies out there, they are definitely getting heavier with the acquisition of GameFX last year and now PCP&L this year. Also, PCP&L was purchased by giving up 5% of the company, but PCP&L will likely be quite a bit higher percentage of the cost (based on headcount) of running the ongoing combined business. This is the main reason I don't like acquiring developers. You give up a big chunk of money just to buy talent and R&D, and then you have to pay wages and expenses even if they prove to be unproductive. That said, I still trust BF can make something out of both GameFX and PCP&L, but the payback on these deals appears uncertain. As for the $3.50 EPS this year, I think you are much too high. Given the release outlook for the next two quarters, I would be surprised if we make anything more than $.70 combined in the two quarters. In order to make $3.50 for the year, we would then have to have earnings of $2.00 in the 4th quarter. Possible, but highly improbable in my opinion. FWIW, I think the analysts will be much closer for the rest of the year. Kory P.S. On second thought, I guess the options given to PCP&L will not be considered "contingent consideration" since they are being given at the time of the closing, and are not tied to any future actions/results to receive them. Still funny how GameFX can be a purchase and PCP&L a pooling when on the surface, they appear to be very similar deals. It really doesn't make any economic difference, but I can see why the FASB decided to chop one method out.