THQ Standing on Its Own

Video-game publisher THQ(THQI Quote - Cramer on THQI - Stock Picks) has plans to weather the transition toward new game consoles much better than its rivals.

THQ said during a meeting with analysts Friday that it will focus on Nintendo's(NTDOY Quote - Cramer on NTDOY - Stock Picks) best-selling Wii game console and move toward cutting its dependence on licensed games.

This two-pronged strategy will help the company go after the growing audience of casual gamers who have opted for the Wii, while increasing THQ's margins in games for its hardcore users.

THQ plans to release 11 titles for Wii in fiscal 2008, including certain Wii exclusives. THQ also plans to increase the number of games it launches for the Nintendo DS platform.

Though licensed games such as Cars and SpongeBob Squarepants were big hits for THQ in fiscal 2007, the company says its own games didn't do that badly.

More than 50% of fiscal 2008 revenue is expected to come from internally developed games, up from 40% in 2007 and 30% in 2006, the company said.

Agoura Hills, Calif.-based THQ says it expects 50% of its revenue in fiscal 2008 to come from next-generation consoles, about 20% to 25% from handheld platforms, and 15 to 20% from Sony's(SNE Quote - Cramer on SNE - Stock Picks) older-generation PlayStation 2. About 10% is likely to come from sales of PC games.

Sony's PlayStation 3, Nintendo's Wii and Microsoft's(MSFT Quote - Cramer on MSFT - Stock Picks) Xbox 360 make the troika of the next-generation consoles, and the transition from older consoles to these new platforms has been a challenge for many video-game companies.

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