THQ sells 2.6 million copies of Homefront video game
Despite being savaged by some critics when it debuted in March, THQ Inc.’s ambitious shooter game Homefront has shipped 2.6 million copies, the Agoura Hills video game publisher said Tuesday.
The sales pushed the title well past the company’s break-even mark of 2 million copies, said Brian Farrell, chief executive of THQ, during a conference call with analysts to announce the company’s fiscal fourth quarter financial results.
For each copy it sells beyond the 2 million mark, the game company sees an approximately 60% profit margin, which THQ chief financial officer Paul Pucino characterized as “extremely, extremely high.”
Homefront’s rosy sales picture stands in stark contrast to the negative reviews of the title, which averaged about 70 out of a possible 100 points on Metacritic, a site that aggregates game reviews. The score was considered low for a game in the highly competitive shooter genre to be considered commercially viable.
Although Homefront was one of the most expensive games THQ has developed — costing more than $30 million — the company set the mark relatively low for achieving profitability, mainly because the franchise was new and unproven.
Homefront takes place in a dystopian future in which the United States is occupied by North Korean forces after being attacked by nuclear bombs.
THQ reported a 37.2% revenue decline in its fourth quarter ended March 31 to $124.2 million, down from $197.7 million in the same period a year earlier. Its net loss widened to $44.1 million, or 65 cents a share, from $10.4 million, or 15 cents a share, a year ago.
Because of the way THQ books its revenue, the results don’t include revenue from Homefront sales, which will appear in the following two quarters. Including Homefront, THQ would have seen a 26% bump in sales to $248.6 million in the quarter, up from $197.4 million a year earlier. Net income would have been $10.5 million, or 15 cents a share, up from $4.4 million, or 6 cents a share.
THQ also announced an upcoming title for Facebook called Margaritaville, a licensed game based on Jimmy Buffett’s iconic song. The game would be the second social game THQ has on Facebook, the first being UFC Undisputed Fight Nation, based on the mixed martial arts franchise.
Shares of the company gained 11 cents to close Tuesday at $4.12, but fell 22 cents to $3.90in after-hours trading following the earnings release.
