XBOX-HQ.COM - EA Profits Drop, THQ Exceeds Guidance

A mixed year for game publishers

It's always like this when a new hardware cycle begins: consumers may have spent more overall on gaming in 2005 than in 2004, but a big chunk of that for some was eaten up by the Xbox 360. Even those who didn't actually get to buy one held off on game title purchases in anticipation of getting a new console. And some savvy gamers are even saving up for the PS3 or the Revolution. Current-gen games? Old news.

So it doesn't come as a shock that publishers have been reporting lower numbers for 2005 than they did for 2004. Both EA and THQ reported a decrease in profits, EA by as much as 31 percent (hence the lay-offs?), prompting analyst Michael Pachter to comment, "The year's a mess. None of us thought six months ago the holidays would be so weak, and no one expected there'd be such a dramatic decline in sales for the current-generation of games." Well, actually, I think we did. Or rather, you did, Mr. Pachter. Game sales decline was a notable trend this year.

On the bright side, THQ exceeded their guidance numbers in spite of a dip in profits, and announced the founding of a new studio, Kaos Studios, which is currently working on an original IP for release in 2007. The team is anchored by developers who previously worked on the Desert Combat mod, and were brought in by Digital Illusions CE to do work on Battlefield 2. That studio, Trauma, was closed after EA bought a majority stake in Digital Illusions.

THQ also announced an exclusive deal to release a game based on the movie Monster House, under co-executive producers Steven Spielberg and Robert Zemeckis.

News-Source: http://xbox.1up.com