Heavy Losses Continue for Game Maker THQ Inc.

THQ Inc., a Calabasas-based maker of video games, reported continued heavy losses and a sharp drop in sales for the fourth quarter and year that ended Dec. 31.

The company posted a loss of $9.72 million in the fourth quarter, down from a $10.5-million loss in the same three-month period a year earlier. Sales tumbled to $4.34 million, down 67% from the fourth quarter of 1993.

For the year ended Dec. 31, THQ reported a loss of $17.5 million on sales of $13.3 million, compared to a year-earlier loss of $16.2 million on sales of $37.5 million.

The company attributed the decline in sales to a drop-off in demand for 16-bit game cartridges, which prompted the company to slash prices in an effort to liquidate inventories of these cartridges.

THQ also said $4.8 million of the loss was related to manufacturing and marketing costs for a new video game modem the company launched in the fourth quarter. Further, the company said it wrote off $3.75 million in products that were abandoned in the development stages because management believed sales would not justify further investment.

The company said it hopes to rebound by publishing 22 games in 1995, twice as many as in 1994, and by imposing strict inventory controls to avoid the pile-up of products that hurt the company last year. “Although 1994 was another difficult year for THQ, we believe that we have taken appropriate measures to stabilize operations,” said Brian J. Farrell, chief executive of THQ.