Success of UFC Game Making Analysts Bullish on THQ

June 10, 2009

With THQ’s gameplan of putting out fewer, bigger games, the company looked to have been going with an all-in strategy, one that may be paying dividends thanks to the success of UFC 2009: Undisputed. Gamasutra reports that the UFC game has markedly improved the fortunes of the troubled video game maker:

We are increasingly more optimistic on [THQ’s] near term financial prospects as our focus shifts from near term liquidity concerns to their upcoming game pipeline where buzz is beginning to build, Mike Hickey with Janco Partners said in a research note on Wednesday.

Management continues to rebuild credibility through execution on planned cost cutting, increased financial transparency and recent / upcoming product releases including UFC 2009: Undisputed that meaningfully exceeded our initial expectations.

THQ announced last week that it shipped 2 million copies of the licensed mixed martial arts fighting game UFC 2009: Undisputed. Hickey raised his fiscal 2010 sell-in estimate for the game to 2.75 million units for the fiscal year from 2.025 million. We expect high demand / quality will contribute to strong catalog sales, he said.

Hickey would go on to list the THQ stock as a buy. I think a lot of that owes to Hickey seeing the game as having franchise-ability that will show strong year to year sales.