THQ Closes Studio, Expects Increased Costs, and Hires Two Executives

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THQ announced a studio closure and some future financial pitfalls. The company has also hired two executives and updated its financial guidance for the fiscal year ending on March 31, 2008.
THQ has created two new executive positions. Roy Tessler, who joined THQ five years ago and co-founded THQ's Studio Australia (but has recently served as General Manager of Rainbow Studios), has been named Vice President of Production, Worldwide Studios. Also, Danny Bilson has been hired to serve as Vice President of Creative Development, Worldwide Studios. Bilson previously served as Creative Director for Electronic Arts.

THQ increased its revenue guidance for the third quarter ended December 31, 2007 from $490 million to $509 million thanks to higher-than-expected sales of MX vs. ATV Untamed and WWE SmackDown vs. Raw 2008.

Despite that positive sounding news, THQ expects to book a variety of large costs in its fourth quarter that will negatively impact its fiscal year results. First, THQ expects to book around $20 million in accelerated amortization expenses thanks to games such as Conan, Ratatouille and Stuntman: Ignition performing more poorly than expected.

THQ expects another $27 million in costs thanks to several factors. Included in that are costs related to the cancellation of the PlayStation 3 version of Frontlines: Fuel of War and the cancellation of the PlayStation 2 version of Destroy All Humans: Big Willy Unleashed. Also included are costs related to moving away from the Stuntman and Juiced franchises. Also part of that number are costs associated with cancelling two unannounced console games previously planned for fiscal 2010.

THQ is also closing its Concrete Games studio (that was working on one of the unannounced cancelled games). Costs associated with closing Concrete Games will be included in THQ's fourth-quarter financials. Most former Concrete employees will be offered other positions within THQ.

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