T.HQ Earnings Plunge 67% in 1st Quarter

T.HQ Inc., a Calabasas developer of video games, reported that its first quarter earnings plunged 67% despite a 13% increase in revenue.

In the three months that ended March 31, T.HQ earned $398,000, compared to a profit of $1.2 million a year before. Its revenue totaled $12 million, up from $10.7 million.

The company said the lower profit resulted from the cost of using computer chips with greater memory capacity in some of its video game software. It also said it was hurt by lower profit margins from international sales, increased expenses and sales of some excess inventory at reduced prices.

T.HQ also announced the formation of a joint venture with MCA/Universal Merchandising Inc., which includes a four-year licensing agreement to develop video games for Nintendo and Sega formats. The games will be based on the upcoming NBC television series “seaQuest D.S.V,” a futuristic action-adventure show co-produced by Universal Television and Amblin Entertainment.