THQ Inc. (NASDAQ: THQI) may have just taken a page out of the Apple Inc. (NASDAQ: AAPL) playbook. By creating demand where there has been none, this could be a significant point for THQ that may help it recover in a turnaround from the video game sector and company woes. How do you profit when no new wave of gaming consoles is on the way? By launching a system within a system, and on the Nintendo Wii™ to boot.
THQ has announced uDraw™ GameTablet™. This is the first product of the sort for drawing for gaming systems and this is a Wii™ exclusive for Ninetnedo (NTDOY). In short, those digital artist pads that designers and recreational users have for their PCs will now have a junior version for the Wii gaming system. It looks like it is for kids, but this will have a melt-up to mom and dad too.
The GameTablet launch is scheduled to hit retail store shelves for the holiday season with a suggested retail price of $69.99. The tablet will come bundled with a drawing, coloring and art-based video game called uDraw Studio.
The other boost here is that two titles, Pictionary™ and Dood’s Big Adventure™, will also launch at the same time for $29.99 each.
The uDraw GameTablet will not be available to Europe and other international markets until early in 2011. THQ noted additionally that future waves of new video game titles are planned for next year and beyond.
The Tablet is approximately 9″ by 7″ and is 1″ thick. It holds the Wii remote and art and drawings created in uDraw Studio can be saved to an SD card and emailed or printed out.
What is most surprising than anything here is that Wii did not launch this on its own. It could have been free money. Our last count on Wii consoles was more than 73 million units shipped worldwide, with about 35 million of those being from the Americas.
Wedbush Morgan research has been quoted around the web with this product being able to sell 1 million units without any real marketing efforts. Our guess… there is a much larger opportunity here than 1 million units. The Wii looked like a game terminal for kids when it launched. It turned out that adults loved it too.
Thomson Reuters has estimates for fiscal-February 2011 estimates at -$0.04 EPS on more than $845 million in revenues and fiscal February 2012 estimates are $0.32 EPS and almost $923 million in revenues. This will drive those estimates higher.
THQ shares are trading up over 7% up at $3.93 today on this launch. Keep in mind that its 52-week trading range is $3.33 to $8.29. It seems like the only real risk here is that the company either doesn’t spend a penny on marketing or if there are performance issues with the device.
This is one of those instances where demand is going to be created in a market that previously did not exist. Sounds a lot like a mini-market that has an iPad comparison. A page out of Apple’s playbook.
JON C. OGG