Monday, April 7, 2008

Video game firm THQ sees buying opportunities

THQ Inc (THQI.O) is looking at buying other video game developers, but the publisher of games like "Cars" and "Saints Row" can grow without making acquisitions, Chief Executive Brian Farrell said on Thursday.

"We are seeing some opportunities in the marketplace given the two transactions going on," Farrell told Reuters in an interview at a company event to preview upcoming games.

He was referring to the pending merger between Activision Inc (ATVI.O) and the games unit of Vivendi (VIV.PA), and Electronic Arts Inc's (ERTS.O) $2 billion offer for Take-Two Interactive Software Inc (TTWO.O).

"It's going to create some opportunities because we are actively looking at every developer, every license out there and with our size now we can be more aggressive than larger, slower firms," Farrell said.

THQ has already moved this year to bolster its product lineup. Earlier this week, it said had bought Elephant Entertainment, a maker of casual and online games, for an undisclosed amount.

In January, THQ bought Big Huge Games, a studio focused on strategy games such as "Rise of Nations." Farrell said that team is focused on making a new role-playing game to fill a gap in THQ's product lineup.

Asked if THQ was looking at buying smaller development studios or publicly listed firms, Farrell said: "M&A is not a required or necessary thing in order to grow."

Analysts have said the recent merger activity in the video game industry is partly a result of development budgets for new games soaring into the tens of millions of dollars, putting pressure on smaller firms with limited financial resources.

Farrell said the video game industry was still growing fast despite concerns that a broad U.S. economic slowdown could hit consumer spending.

"We haven't seen any signs of slowdown," Farrell said. He said strong year-end holiday sales of new gaming hardware like Nintendo Co Ltd's (7974.OS) Wii console, Microsoft Corp's (MSFT.O) Xbox 360 and Sony Corp's (6758.T) PlayStation 3.

This year, THQ is banking on new games like criminal action title "Saints Row 2" and "WallE" based on the upcoming Disney/Pixar movie to drive growth after a disappointing 2007 forced it to kill off lackluster franchises like "Stuntman."

He declined to comment on specific financial forecasts, saying THQ would give an updated outlook when it reported results for its fiscal fourth quarter ended in March. The company previously said it expected a net loss of 13 cents per share on sales of $200 million.

THQ shares have risen 23 percent over the past month but its stock is still down 35 percent from a year ago.

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