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Just how badly did uDraw hurt THQ, anyway?
Just how badly did uDraw hurt THQ, anyway?
February 2, 2012 | By Frank Cifaldi

February 2, 2012 | By Frank Cifaldi
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THQ is going to have a hard time offloading its remaining inventory of uDraw video game tablets.

The accessory, which debuted with a big marketing splash for the Xbox 360 and PlayStation 3 this past holiday after a healthy Wii debut the year prior, failed to ignite consumer interest, resulting in a sell-through of fewer than half the units THQ manufactured.

Its failure was a surprise to the company, given its healthy Wii sales and the results of two independent studies that suggested the company was addressing a sizable untapped market by expanding its uDraw lineup.

"We were confident that uDraw would resonate again this holiday, given last year's robust sell-through," CEO Brian Farrell told investors in a conference call on Thursday.

"Our confidence was misplaced."

The company's overestimation is staggering. In all, THQ has sold through 1 million units to stores, many of which are still there, often in the bargain bin. That leaves it stuck with 1.4 million more left unsold in its warehouses.

The result of this misstep, according to the company, is a reduction of $100 million dollars in sales for its crucial holiday quarter, $80 million of that directly related to its excess inventory of uDraw hardware, and $20 million related to its software and a hit taken on selling some of its inventory at a loss.

In terms of income, the company attributes over $30 million of its $54.6 million operating loss just to the uDraw.

Hardware production has of course ceased, and software support for the device seems to be dead as well. THQ says it has developed a plan to move that remaining inventory through retail channels, but other than that, the company has "no other remaining commitments with respect to uDraw," according to Farrell.

"We were looking at uDraw as a bridge to this core and digital future, and that bridge turned out to be a plank that we walked off of," said Farrell.


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Comments


Leon T
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I would like to know exactly why they thought Udraw being a hit on the Wii would mean it would be a hit on the 360 and PS3. It just never made sense to me. They should have learned from DeBlob 2 that just because it sales on the Wii doesn't mean it will sell on other consoles.

Jeremy Reaban
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Well, I think it had something to do with the massive success of Kinect, and the okay outing of PS Move.



Those were clearly inspired by the Wii's success, so THQ thought, "Hey, UDraw sold on the Wii, now that the 360 and PS3 are getting a similar audience, maybe it will be a success on that, too"

Leon T
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Jeremy that would make sense to me if the Wii software that was ported to Move /Kinect didn't sell like crap compared to their sales on the Wii. Udraw just followed the same trend that THQ seemed to ignore.

Joe McGinn
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Spot on Leon. Sadly it's THQ employees paying the price for their leaders lack of vision.

Eric McQuiggan
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@Leon @ 7:53



Where are your numbers for this? What 'Wii Software' are you talking about?

Jason Chen
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If pictures drawn in uDraw is able to be print out on a printer, I say it would have more of success.

Joe McGinn
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THQ has made this mistake over and over, trying to apply kid-friendly Wii successes on core gamer platforms. Same thing they did with de Blob, killed the sequel by going multiplatform. The only surprise is that THQ management is surprised that their exact same repeated behaviour led to exactly the same result.

Dan the gaming Guy
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I laughed when they announced this plan to release uDraw on 360/PS3 and the numbers they were expecting to sell. How did they not see this result coming? The 360/PS3 market is drastically different than the Wii.



In what world would a bunch of teenagers and male adults turn off Call of Duty, Skyrim, Arkem City, etc to play uDraw? Really, you thought they would? To even imagine they would share time on the console so that their kid could play is far fetched.



I see my inner monologue speaking to me right now, "I'm not buying my kid uDraw, I don't want to give him/her a reason to want to use the 360/PS3 this holiday, I'll buy him/her something else, something that will keep them happy and busy so I can use the 360/PS3 more".



For the Wii the device was brilliant and made total sense!! Well done!

For 360/PS3 combined, I would have expected it to move a quarter of the units it did on Wii, if that.



Come on THQ, get in touch with your audience. To give some kudo's, well done on Saint's Row btw!

Chris Hendricks
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It's not entirely crazy. There are plenty of parents who already have a 360/PS3 with a lot of games their kids couldn't play. They probably assumed there was still an untapped audience.



They were wrong, of course...

David Rodriguez
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I completely agree. The ONLY way I can see this working is to incorporate UDraw's scheme into other action games. I think Udraw would make PERFECT sense in a strategy game where you can easily click and highlight units; move about the map (something tells me, I'm not the first to mention that either).



I mean, how big were these"..two independent studies". 1 classroom full of children? .."okay, we're done! another blockbuster here we come!!"

Todd Boyd
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"It sold really well this time last year; why didn't it work again?"



Even if it wasn't a colossal mismatch for the 360, the fact that they thought they could just drop the exact same peripheral (pretty much) in a new environment a year later and laugh their way to the bank is bewildering.

Curtis Turner - IceIYIaN
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Glancing at YouTube, some of the videos are getting 50,000 views, 100,000.



Lot of issues really. Most art is hand drawn on paper, followed with users using a computer. Tablets or whatever seem a lot more common than even just a few years ago.



I think Nintendo users got a computer/secondary console around the time the GameCube/Wii came around.



Computers are the most popular "console" in the world, period. Wii users who don't have a computer, may have got this. Everybody else already has a computer and this is nearly useless for them probably.



Finally, it's based on a controller, not a keyboard. Lack of buttons. Lack of left hand support(A guess of 20 percent userbase).



And finally, the Wii U was announced, making this thing stuck in the past.

Curtis Turner - IceIYIaN
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Does the X-BoX version work on WindowZ? This should've been the main platform. Make the uDraw the secondary platform(WindowZ/uDraw), then open it up to third parties with only 10% of the cut. Then port to consoles and try and take the third party support.

John Woznack
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"Our confidence was misplaced." - Brain Farrell



I think a lot of investor are now thinking their confidence in Brian was misplaced!

Bill Dugan
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The warehouse full of Miracle Pianos may be analogous. It almost brought down Software Toolworks.

Ken Love
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Move over E.T. and make room for the U-Draw Tablet. Almagordo, NM is expecting you. ;-)

Craig Page
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$39.99 is not the clearance bin!!



I'll get one when it gets to $9.99.



Would I be a horrible relative if I bought a bunch at $9.99 and gifted them?

Duong Nguyen
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Someone just didn't do their market research. Instead of iterating on the Wii, they choose to bring it to a hostile market. Can't make too many of those 100+ million dollar bets, esp if your THQ..

Terry Matthes
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I always thought UDraw was a silly idea. I'm sure Wacom would have jumped on that years ago if there was any market for it. You can do more on a PC with a drawing tablet and the cost is the same for an entry level Wacom.


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