Video game retail sales are continuing to languish, so game publishers have been looking for new ways to sell online. It appears to be working for Activision Blizzard Inc., but the verdict’s still out on THQ Inc.
Santa Monica’s Activision Blizzard reported last week that an increase in sales of its digital content bolstered the company’s total revenue and net income for the first quarter this year.
But on May 3, THQ, which has made a foray into online casual games, reported revenue decline and a wider net loss for its most recent quarter.
The video game industry is still learning how to move away from games sold in stores to digital downloads and online titles, said Mike Hickey, an analyst for Janco Partners in Denver.
He points to Activision Blizzard as a model of how to make the transition. The company develops and operates popular multiplayer online games such as “World of Warcraft” and has sold millions of game updates for its “Call of Duty” franchise through online downloads.
“They’ve done a good job,” Hickey said. “The first quarter is seasonably a really weak period. They hit it out of the ballpark.”
The company reported first quarter revenue of $1.4 billion, up 8 percent from $1.3 billion in the same period last year. Net income was $503 million, an increase of 32 percent from $381 million in the first quarter last year.
Meanwhile, the success of THQ’s third-person shooter “Homefront” helped the company beat Wall Street estimates, despite early criticism of the game. But the company’s revenue and net income declined.
THQ reported revenue of $124 million for its fiscal fourth quarter, down 37 percent from $198 million in the same period last year. Net loss was $44.1 million compared with a loss of $10.4 million.
The publisher is known for its family games such as “Jeopardy,” but has lost customers to cheaper online games, said Hickey, who rates both companies’ stock a “buy.”
One of THQ’s successes has been its uDraw GameTablet, an accessory that lets players create virtual drawings. The uDraw tablet could help the company recapture the casual gaming market, Hickey said.
“It’s rare that you see a publisher develop hardware that’s polished enough and have a successful release,” he said. “I think they showed some real brilliance.”
The stock prices of both companies have climbed since reporting earnings. Activision shares were up nearly 2 percent for the week; THQ shares were up 2.3 percent.
Spreading Search
MyLife.com is taking its people search international.
The Santa Monica company launched a website in the United Kingdom last week in what Chief Executive Jeff Tinsley said will be the first of many international expansions.
“We took a look at our search engine and realized we already had a lot of information from people in other countries,” Tinsley said. “We realized we could provide a useful search for other markets.”
MyLife collects public information about people to create a searchable online database similar to a phone book. In the United States, MyLife has profiles for more than 205 million people. It already has 25 million profiles in the United Kingdom.
Creating a profile and searching MyLife’s database are free, but people who want access to advanced features, such as viewing profiles or the site’s sinlges service, must pay a subscription fee.
The private company claims more than 60 million registered users and more than 700,000 paying subscribers.
International expansion is the latest move in the company’s transformation into a broader people-search site.
MyLife was founded in 2002 as Reunion.com, a place for former classmates to reconnect. During the last year, the company has added features, including a professional networking component similar to LinkedIn and a singles service.
Tinsley said MyLife offers people search features that social networks don’t provide.
“People don’t just want to find friends,” he said. “They need to find these different people but don’t necessarily want to be their friend (online).”
Hiring & Promotions
Demand Media Inc. has promoted Taryn Naidu to executive vice president of registrar services and general manager of eNom Inc., a domain name wholesaler. Naidu was previously senior vice president at the Santa Monica media company. … Hawthorne space shuttle manufacturer Space Exploration Technologies, known as SpaceX, has named Bret Johnsen chief financial officer. Prior to joining the company, Johnsen was senior vice president and chief financial officer at Mindspeed Technologies, a Newport Beach online communication company. … El Segundo software company Leads360 has named President Nick Hedges its new chief executive. Hedges joined Leads360 in 2008.
Staff reporter Natalie Jarvey can be reached at [email protected] or at (323) 549-5225, ext. 230.
