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Author: jonesc One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 611  
Subject: Re: Good earnings yesterday! Date: 5/6/2004 5:41 PM
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Hmm yes, don't know why these forums are all so quiet.

I think the answer to your question is "very replaceable".

It used to be a big criticism that THQI was too reliant on their wrestling license, but they've proven themselves to me by continuing to hold the license and at the same time brought it down to 20% of their revenues.

How replaceable is Nemo? I think very replaceable. Just look at Nemo itself. Who saw it coming? If you looked at THQI's lineup coming into the christmas season, would you have looked at Nemo and said "Wow, that's going to sell big!". I know I didn't. And that's really THQI's story. They do it over and over again.

Look at Gameboy advance. Gameboy? Isn't that that junky old handheld computer I played with back in the 80's? Yes. And they sell a lot of it.

THQI's products aren't flashy. Their games aren't all that great. But they produce a lot of them, produce them cheaply, and sell them for gold.
Each season, they find appeals where you wouldn't expect them.

Part of THQI's secret recipe is their production. While most game companies take several years to produce a game, THQI does it in 1-2 years. And they control several development houses to do it: (Cranky Pants Games, Heavy Iron, Helixe, Outrage, Pacific Coast Power & Light, Rainbow and Volition studios, and THQ Australia).

The games aren't great, but they are solid games that are marketed to people who aren't looking for technical wows. But THQI is great at picking names that will appeal, and making a game around it. Not all of them end up being hits, but they bring a lot of offerings to market each year and they always seem to push the winner in bulk.

THQI is a tough company to check up on. I have a lot of trouble predicting how well they are going to perform each game season, but I rest assured knowing that they have a great balance sheet, a great history of growing their business, and a management team that has a good formula for success (buy development houses cheaply and milk them for all they are worth).


So, to summarize, I wouldn't worry too much about what the replacement will be, but rest assured that THQI will find replacements for Finding Nemo. If not this year, then over long term.

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