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THQ:  Dark Millennium  Costs In $50M Range, uDraw Projections Up To 1.7M

THQ: Dark Millennium Costs In $50M Range, uDraw Projections Up To 1.7M

March 9, 2011 | By Kyle Orland

March 9, 2011 | By Kyle Orland
More: Console/PC

THQ executive vice president and CFO Paul Pucino said the company is projecting costs in the $50 million range to get its first MMO, the Warhammer-licensed Dark Millennium, to market in 2012, putting the title's development budget at "the high end of a core game," he said.

Speaking in an investor briefing call which Gamasutra attended, Pucino wouldn't comment on the number of subscribers he saw as necessary to break even on those costs. He did, however, say that a successful launch could "continue to generate [revenue] over a long period of time -- five, six, seven, eight years," and that the project could be very profitable in that time frame.

Pucino once again raised public expectations for fiscal year sales of the company's uDraw tablet for the Wii, which launched last November. The company now expects to sell 1.7 million tablets by the end of the fiscal year in May, up from a 1.3 million sales projection in December.

The tablet reportedly sold 1.2 million units in the 2010 calendar year, and recently launched in Europe and Australia.

In the briefing, Pucino reiterated plans to release new uDraw software every three or four months, and again floated the possibility of allowing other publishers to make software for the device. This third-party software would presumably drive sales of THQ's hardware, Pucino said, which continues to generate "software-like margins" on each sale.

After what Pucino saw as an investment year in the current fiscal period, he said he sees the next two fiscal years being characterized by growth for the company, driven by hit franchises, a transition to digital revenues, and a newly lean cost structure.

While that period will see one "major release" from THQ every quarter, Pucino also said the company is planning only one or two new AAA franchises each year, with sequels to those franchises spaced out every two or so years.

While Pucino said consoles would remain the dominant portion of the overall game market over the next two years, he saw large growth potential in online and mobile markets, as well as, intriguingly, "emerging technologies" that hook up to living room TVs.

“For a very, very small investment, and a very very small piece of hardware, any television set in any home can become a gaming platform, once again very good for us,” he said.

Responding to a question, Pucino said the company is looking to transition away from its dependence on licensed properties, which represent up to 70 percent of THQ's balance sheet.

“To get to 50-50 would be something very appealing to us," Pucino said on the desired split between licensed and original revenues, citing the increased profit margins on original properties.

Pucino also spoke positively about the company's newly opened Montreal studio, which he said recently hired its 100th employee as part of a plan to staff 400 people at the location over the coming years. He said the tax incentives from the government there make costs for games developed out of Montreal up to 40 percent lower than those at other studios.

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