Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message| ()  

THQ Inc. (THQI)

F2Q07 Earnings Call

November 3, 2006 11:00 am ET

Executives

Julie MacMedan - Director, IR

Brian Farrell - President, CEO

Ed Zinser - EVP, CFO

Analysts

Justin Post - Merrill Lynch

Colin Sebastian - Lazard

Heath Terry - Credit Suisse

Evan Wilson - Pacific Crest

Edward Williams - BMO Capital Markets

John McPeak - Prudential

Arvind Bhatia - Sterne Agee

Tony Gikas - Piper Jaffray

John Taylor - Arcadia Investment Corporation

Lowell Singer - Cowen

Elizabeth Osur - Citigroup

Mike Hickey - Janco Partners

Jeetil Patel - Deutsche Bank Securities

Presentation

Operator

Good day, ladies and gentlemen, and welcome to the THQ Inc. second quarter earnings conference call. (Operator Instructions) I would now like to turn the presentation over to the host for today's conference, Director of Investor Relations, Ms. Julie MacMedan. Please proceed, ma’am.

Julie MacMedan

Thank you and good morning, everyone. On today's call, management will make forward-looking statements and projections regarding our expectations, estimates and predictions of the future. These statements about our business are based in part on assumptions made by management and are not guarantees of future performance. Therefore, actual results may differ materially from today's forward-looking statements due to several risk factors which are described in our March 31, 2006 Form 10-K. A copy of this filing may be obtained from our web site.

In addition, our results are subject to a number of risks and uncertainties associated with matters relating to the review of the company's stock option grant practices, which could cause actual results to vary from the preliminary results discussed today. The forward-looking statements made on today's call are as of November 3, 2006, and we disclaim any duty to update them.

On today's call, we will discuss THQ's preliminary results for our fiscal 2007 second quarter and guidance for the remainder of fiscal 2007. As our news release indicated, these results do not take into account any adjustments that may be required in connection with the completion of our review of our stock option grant practices and should be considered preliminary until we file our quarterly report on Form 10-Q for the second quarter of fiscal 2007.

The review will likely result in the need to restate our historical financial statements to record additional non-cash, stock-based compensation expense and related cash and non-cash tax adjustments. We have not yet determined the amount of such charges, the resulting tax and accounting impact, whether the impact on our current financial statements will be material, or what historical periods require restatements.

It is likely that as a result of the review of our stock option grant practices, THQ current expects that we will not file our quarterly report on Form 10-Q for the second fiscal quarter of 2007 on a timely basis.

Also today, we will discuss non-GAAP measures in describing THQ's financial performance. Please refer to the reconciliation of these measures to GAAP results in the tables provided in today's results release.

On today's call, Brian Farrell, THQ's President and Chief Executive Officer, will review our recent accomplishments and we'll then turn the call over to Ed Zinser, our CFO who will review the company’s operating results and financial outlook. Brian will then close with a discussion of our plans for fiscal 2007 and long-term growth. We will then conduct a question-and-answer session following prepared remarks.

With that, I would like to introduce Brian Farrell, our President and Chief Executive Officer.

Brian Farrell

Thank you, Julie and good morning, everyone. We are pleased to report record sales and earnings for our second quarter. This quarter, we delivered on our promise to continue building our portfolio of internally-developed, owned properties. Saint's Row was the number one console title in September, and Company of Heroes was the number one PC title in September in North America. Most importantly, we demonstrated solid operating leverage on our revenue upside in the quarter.

During the quarter, we shipped more than 1 million units of our new owned franchise, Saint's Row, which was the first open world game on next-generation consoles. The launch of Saint’s Row was executed flawlessly. We built a high level of interest at retail with our extensive preorder campaign, and reached consumers directly with our online Saint's Row demo, which achieved a record 500,000 downloads before the game hit store shelves on August 29. We supported the game with a multimillion dollar advertising campaign across North America, Europe, and Asia Pacific.

Company of Heroes achieved the highest rating ever for a real-time strategy PC game. With this title and the success of Dawn of War, our Relic Entertainment Studio has established itself as the leading RTS studio.

We are very pleased with the sales results for these titles to date. We're even more excited about establishing these new franchises. We plan to leverage and extend these brands for many years to come and to deploy these proprietary technologies across our studio systems for use in future titles.

During the quarter, we also continued to demonstrate our mass market leadership. We shipped 2 million units of games based on Disney Pixar's Cars, bringing life to date shipments to more than 4 million units. Since we signed our master agreement with Disney and Pixar, we have shipped more than 21 million units of Finding Nemo, The Incredibles, and Cars combined. We have just shipped Cars on the Xbox 360 to take advantage of the DVD launch. In mid-November, we'll bring Cars to the Nintendo Wii as that platform launches. We're very excited about our continuing, long-standing partnership with Disney and Pixar on their next four films, starting with Ratatouille next summer.

Each of these successful products was developed by our studio system, which now includes more than 1,300 people located in 15 studios, up 30% from a 1,000 people a year ago. We're pleased that our best in class studio system has added two more owned original properties and developed new technologies that can be shared across our studio system.

Our second quarter success underscores THQ's ability to execute on our plan for long-term revenue growth and margin expansion. Our solid first half has enabled us to raise our net sales and EPS guidance for fiscal 2007. We expect to continue this momentum into fiscal 2008 as we capitalize on a year of expected double-digit software dollar growth for the industry.

Next fiscal year, we plan to leverage our core brands, launch sequels to our established brands, and introduce exciting new original games with more than 50% of our revenues coming from next-gen consoles.

Looking out over the next several years, our leading mass market position, growing share of the core gamer segment, strong global position and leadership on emerging technologies position us to grow our revenues at or above the market and to increase our operating margins.

Now Ed Zinser, our CFO, will review our fiscal 2007 second quarter operating results and our forecast for fiscal 2007.

Ed Zinser

Thank you, Brian and good morning. Today I'll review our preliminary Q2 financial results and provide guidance for the upcoming December and March quarters and for our full year. As Julie mentioned in our opening remarks, the results and guidance I discuss do not take into account any adjustments that may be required in connection with the stock option grant practice review. In addition, THQ's financial results will include equity-based compensation expense from the adoption of FAS 123 R. As I discuss our financial performance in more detail, I will use the non-GAAP numbers, which give the true apples-to-apples comparison versus prior-year line items.

Net sales for the second quarter of fiscal 2007 were $240 million, ahead of our guidance of $195 million and 68% ahead of the prior-year quarter. Reported non-GAAP net earnings of $0.25 per share, which was $0.24 better than our guidance and $0.26 ahead of the prior-year quarter. Net sales in the second quarter were driven by Saint's Row and Cars, as well as strong performances by Company of Heroes and Monster House. Saint’s Row accounted for the greatest upside versus guidance.

From a geographic perspective, all regions recorded significant double-digit gains versus the prior year quarter. North America was up 47%, Europe was up 115%, and Asia Pacific was up 52%.

Gross margin for the quarter was 68%, up 160 basis points versus the prior-year quarter. Higher-priced Saint's Row and Company of Heroes sales mix versus lower-priced new releases in the prior year quarter drove the margin improvement.

Licensed, amortization and royalty costs of 9% of net sales increased by 115 basis points compared to last year, due primarily to Cars, which was approximately 22% of the second quarter sales mix. Software development and amortization of 18% was up one point versus the prior year quarter. This is primarily due to the higher product development costs from Saint's Row and Company of Heroes. Product development expenses of $24 million were essentially flat versus the prior year period.

Selling and marketing expenses were 16% of net sales, down from 18% in the prior year quarter. This was despite the launch of two new intellectual properties in the second quarter, Saint's Row and Company of Heroes which as Brian discussed, were heavily marketed. Strong sales of these titles, as well as catalog sales and the strength of Cars leveraged our overall marketing spending as percentage of net sales.

G&A expenses were $16.1 million, up from $12.8 million in the prior year quarter. Legal fees and facility costs, domestic and international, were the key drivers of the increase.

Net income for the second quarter was $16.4 million, or $0.25 per share, excluding equity-based compensation expense compared to a net loss of $0.9 million or a $0.01 per share in the prior year quarter. Significant revenue from our two owned intellectual properties, Saint's Row and Company of Heroes, and our licensed properties, Cars, Monster House, and Bratz drove our bottom line performance.

Now let's turn to the balance sheet. THQ ended the quarter with $284 million or $4.25 per diluted share in cash and short-term investments. This represents a decrease of $88 million versus the March 31, 2006 balance and an increase of $10 million versus the prior-year quarter end. Key uses of cash this quarter were for the Disney Pixar and Nickelodeon annual advances.

Net accounts receivable of $110 million increased from $78 million at September 30, 2005. Our days sales outstanding on a rolling 12-month basis was 45 days. This increased from 33 days in the prior-year period, due primarily to the timing of sales during the quarter in Europe. Accounts receivable reserves were $78 million at quarter end, up from the $52 million balance on September 30, 2005. The coverage on a trailing nine months of net sales basis was 12% versus 9% for the prior year quarter end.

Inventory was $42 million, an increase from the $37 million at September 30, 2005 due to the growth in the business. On a rolling 12-month basis, inventory turns were 9X versus 11X a year ago.

Our investment in licenses of $105 million increased from $80 million in the prior quarter end. The largest addition in the quarter was from the Disney-Pixar Ratatouille which is scheduled to ship next fiscal year. Software development increased to $145 million at quarter end, up from $133 million at June 30, 2006. This is due primarily to the upcoming Q3 release of WWE Smackdown! Vs. Raw 2007, and to the Ratatouille and Stuntman releases planned for next fiscal year.

The prepaid expense and other current asset increases were primarily for product-related payments in the international territories and in North America. Property and equipment of $41 million was up slightly from the March 31, 2006 balance of $37 million, due primarily to development kits and facilities. Total current liabilities were $172 million, up $24 million compared to the March 31, 2006 balance. The increase was primarily due to vendor payments for manufactured products and for product development.

The company's current ratio was 4:1 with working capital of $479 million, up from $405 million a year ago. Operating cash flow for the second quarter was negative $29 million versus negative $42 million in the prior year quarter. The net use of cash was due primarily to spending for software development and growth in receivables due to the significant increase in net sales versus last year. Return on invested capital on a rolling 12-month basis was 13%. We had no borrowings at quarter end and total stockholder's equity was $660 million.

That concludes the financial results for the second quarter of fiscal 2007. Before I provide initial guidance for the third and fourth quarters and discuss THQ's financial projections for the full year of fiscal 2007, I would like to review some of our assumptions.

The two consoles yet to launch in this transition year makes it more difficult than usual to predict market performance. Nonetheless, our software dollar growth expectations for calendar 2006 now call for essentially flat in Europe and slightly up for North America. We expect continued current generation software dollar declines with an offsetting increase in Microsoft Xbox 360, Sony PS3 and PSB and Nintendo Wii and DS software sales. We expect that select titles on next generation platforms will continue to achieve a premium price.

Our calendar 2006 unit hardware forecasts have been updated since the last quarter and reflect first party announcements. In North America, each platform is as follows: Playstation 2, 4.5 to 5 million; Xbox, up to a 0.5 million; Game Cube, 0.5 million to 1 million; GBA, 2.5 to 3 million; PSP, 2.5 million to 3 million; DS 5 to 5.5 million; Xbox 360, 5 to 5.5 million; PS3, up to 0.5 million; and Nintendo Wii 1.5 to 2 million.

In Europe and the other territories, each platform is as follows: Playstation 2, 3 million to 3.5 million; Xbox, 0.5 million; Game Cube, up to 300,000; GBA, 1 million to 1.5 million; PSP, 2 million to 2.5 million; DS 4.5 million to 5 million; Xbox 360 2 million to 2.5 million; and Nintendo Wii, 0.5 million to 1 million.

Turning to the third quarter of fiscal 2007, our initial guidance is $400 million to $425 million in net revenue and a non-GAAP profit of $0.69 to $0.74 per share. This excludes $0.04 per share in equity-based compensation expense. Our third quarter results are expected to be driven by 11 new releases across 32 SKUs. As Brian will discuss, we have a strong lineup of new releases planned as well as continued sales of Cars, Saint's Row, and Company of Heroes.

For our fourth quarter of fiscal 2007, our initial guidance is for $145 million to $170 million in net revenue and a non-GAAP profit of the $0.17 to $0.22 per share. This excludes $0.04 per share in equity-based compensation expense. Our fourth quarter results are expected to be driven by our Supreme Commander and Stalker PC releases, as well as the Titan Quest expansion pack.

For full year fiscal 2007, we have increased the guidance range to net revenue of $925 million to $975 million and net income of $0.95 to $1.05 per share, excluding the impact of equity-based compensation expense of $0.17. Our full year guidance reflects stronger than expected first-half performance, offset somewhat by revenue timing in Q2 versus Q3, increased legal fees, and the move of GTR on Xbox 360 to fiscal 2008.

As Brian will discuss, our strong fiscal 2007 will position us for an even stronger fiscal 2008. I would now like to turn the call back to Brian.

Brian Farrell

Thanks, Ed. Our fiscal 2007 plan calls for double-digit growth outpacing our expectations for the industry. The products you saw in our second quarter, Saint's Row and Company of Heroes, are indicative of the strong pipeline of original properties to come from our studio system. Through our global product focus, and worldwide distribution network, we are driving 40% of total revenues outside of North America. We are exploiting new emerging technologies such as downloadable content, wireless gaming, and in-game advertising.

We planned our fiscal 2007 year to offer a balanced mix of the best mass market brands and exciting new properties for core gamers and to publish on the platforms we can realize the best returns. The bestselling platforms year-to-date have been the DS, PS2, and Xbox 360. We are the number one independent publisher on the DS in North America through September, and we are shipping four DS SKUs this quarter. We'll have six SKUs on PS2 this holiday, including Destroy All Humans! II, three titles based on our Nickelodeon franchise, the Sopranos, and our flagship WWE brand. We'll bring two of our biggest brands to the Xbox 360, WWE and Cars, and expect continued strong sales of Saint's Row on that platform this holiday.

With respect to the new consoles slated for launch this month, the Nintendo Wii and Playstation 3, we're aligning our brands to launch on the right platforms at the right time. Our strong mass market portfolio aligns well with Nintendo Wii's console and we have four SKUs planned for the launch of the Nintendo Wii – Cars, Spongebob, Avatar and Barnyard. We expect this platform to reach a multimillion unit installed base quickly and we plan to launch an increased number of Wii SKUs in fiscal 2008.

We've chosen to release our titles on PS3 as its installed base grows in calendar 2007. We have a significant number of PS3 titles planned for fiscal 2008 including new original properties, Front Line Fuel of War, Stuntman, and our next WWE Smackdown! Vs. Raw title.

We're pleased with our significantly increased investment on the PC platform this year. Year-to-date our PC market share in the U.S. is up 29% over the same period a year ago. Our fiscal 2007 plan includes four PC titles in the most important segments of the market: real-time strategy, role-playing games, and first person shooters. Titan Quest and Company of Heroes have already launched successfully. In our fourth quarter, we plan to release Supreme Commander, Stalker, Shadow of Chernobyl, and the Titan Quest expansion pack.

As we look further out, in each year of the new cycle we plan to grow our sales at or above the market as we increase our operating margins. We plan to continue to grow our portfolio of core gamer and mass market franchises. We plan to exploit emerging technologies and to continue to leverage our global infrastructure to drive more units shipped per title.

For fiscal 2008, our growth will be driven primarily by increased sales of owned properties. While we have not yet announced our full product slate, we have announced new original property Front Line Fuel of War, as well as sequels to proven million-unit selling franchises, Juiced, MX, and Stuntman. Stay tuned for more product announcements in the coming months.

We also plan to grow our core WWE, Pixar and Nickelodeon brands as we extend them onto new platforms next year. We also expect to improve our operating margins next year. We are targeting north of 50% of fiscal 2008 net sales to come from products developed by our internal studios, up from 40% in fiscal 2007.

We plan to continue to control development spending by leveraging our core technologies and tools across studios and through the centralization of our outsourcing efforts in our XDG Group. We expect owned intellectual properties to approach 40% of net sales in fiscal 2008, up from 20% in fiscal 2007. Our margins should also benefit from a higher average sales price in fiscal 2008, reflecting a greater mix of games on next generation consoles.

Finally, we expect to begin to realize margin opportunity from downloadable content and in-game advertising in fiscal 2008. On that subject, we just started to release downloadable content for Saint's Row in late September and we are encouraged by the early activity level. In the first month, more than 50,000 users have downloaded and paid for our first customization pack. This represents a 10% attach rate to the more than 0.5 million online players of Saint's Row. As we continue to expand the Saint's Row online player base, we'll continue to offer new content on a regular basis. For fiscal 2008, we have secured in-game ads in our racing titles, Juiced, MX and Stuntman and plan to expand this initiative to other titles.

We expect growth in our wireless business in fiscal 2008 and we continue to focus on increasing our profitability per SKU on this platform. We look forward to adding to the Pixar title Ratatouille to our wireless line-up next year.

In summary, we posted a strong first half and are well on our way to achieving our fiscal 2007 double-digit growth plan, outpacing the industry. We delivered on our promise to build our portfolio of internally-developed owned properties. We've grown our revenues for 11 consecutive years and are well on our way to our 12th. Importantly, we've positioned ourselves for continued growth over the next several years.

We now look forward to responding to your questions. Operator, please open up the call.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Justin Post - Merrill Lynch.

Justin Post - Merrill Lynch

Hi, a couple questions and then one on the options, if you can answer it. It looks like a lot of the companies in the industry are pushing some titles out to fiscal '08. Do you see next year being really crowded and just difficult as far as the number of SKUs, and really getting the consumers to buy all the new SKUs? Or do you think just industry growth is going to be so strong that it supports all the additional titles next year?

Brian Farrell

Well, Justin, you always have significant competition in this industry. That's something that's never going to go away. What we've learned over the last couple of years with the way we've timed things like Destroy All Humans! and Juiced last year, and things like Saints Row and Company of Heroes this year, you pick a strategic window with a very targeted property, and that's the way to be successful in the industry.

Next year will be competitive. I don't see it being any more competitive to any other year. For THQ specifically, our title count is fairly flat. So, I think what you're seeing in next-gen is probably fewer titles on the market. We're always mindful of our competition, but we're very confident in our product flow.

Justin Post - Merrill Lynch

Okay. And as we look forward to the back half guidance, clearly you had a nice beat this quarter, congratulations on Saints Row. It feels like you're kind of bringing down the year a little bit relative to the upside in 2Q. Can you talk about the title that you pushed out and is that the sole reason? Do you feel better about the back half industry-wide as you look forward to the second half? Is there still some upside potential?

Ed Zinser

Sure. When you look at our second half of the year, Justin, we've got a couple of things that were surely positives for us in the first half of the year that obviously contributed to the significant revenue performance. We had some sales shift into Q2 from Q3 based upon the very strong performance of Saint’s Row and we did move our Bratz title in amongst to coincide with the licensors toy launch. So, those two things shifted some revenue in.

We've also got some incremental legal expenses on the full year, and as mentioned earlier, we moved our GTR title out into next fiscal year. So, those are really the key reasons why we flow through about a nickel of the upside on to the full year. In total, we took our full year up $25 million in sales and we saw about a nickel of that through to the bottom line.

Justin Post - Merrill Lynch

Okay, on the option announcement today, can you comment at all on where the investigation is and does that affect any of the current management as far as the option grants?

Brian Farrell

Here's what I'll say about the options inquiry and investigation. It began a couple of months ago, as we announced. As soon as it's wrapped up, we'll communicate that to you, but there's really nothing else we can say at this time.

Justin Post - Merrill Lynch

Thank you.

Operator

Our next question comes from the line of Colin Sebastian - Lazard. Please proceed.

Colin Sebastian - Lazard

Thanks and congratulations on the very strong quarter. A couple of questions. You guys have been adding new studios and headcount at a fairly rapid rate over the past couple of years. And I'm just curious if you feel like you're at a stage where you can leverage those assets and have what you need for the new cycle, or should we expect more additions? Secondly, housekeeping, what were catalog sales in the quarter? Thank you.

Brian Farrell

I'll take the first part of that. Yes, in terms of the studio system, yes, that's been the biggest strategic push for the company. As you have known, Colin, over the last five or six years as we've grown from 100 people in 2000 to over 1,300 sitting here today. I'm very pleased with the way we've grown that out. It's been a lot of growth, I think we've managed it fairly very well.

But we are always looking; as this industry will always be a talent-based industry. But what I will say is, now that we've got it built out, I think you'll see more additions, you'll see growth at the studios that exist. We're always looking to acquire or build new studios. I'm not going to rule that out, but I think what you will see going forward is probably adding more to the talent base that we have in our very talented studios.

Ed Zinser

Certainly will be growing at a lesser rate than we have over the past several years, some fairly significant increases. So, you will see that studio system growing, but not at the same rate you've seen over the past several years, but we are really shifting the business from heavily, externally developed to a better balance.

Our catalog sales for the quarter were 22%.

Colin Sebastian - Lazard

Okay. Thanks a lot.

Operator

Our next question comes from the line of Heath Terry - Credit Suisse.

Heath Terry - Credit Suisse

Great. If you could just give us an update on where you are in the in-game advertising front? As you look at all of these incremental revenue opportunities on next-gen, whether it's in-game advertising or online downloads, what kind of revenue per unit opportunity you see from these additional areas as we start to get to the real meat of the cycle?

Brian Farrell

That's a great question, Heath, and I wish we had a really clear and concise answer. We've played with a lot of numbers and I'm sure you have. I know our competitors have and I know EA was talking about it yesterday, I presume others will as well. I mean, here's what I'd say about that. What I like is the trends. It looks like there's a real business. You asked first about in-game advertising. So, there seems to be real momentum in that market.

We're working with Massive and Double Fusion. We've talked in our prepared remarks about Juiced and MX and Stuntman, driving games are really conducive to in-game advertising. I'm very pleased with the interest that advertisers have in brands like that. As I also said, we're looking at the rest of the portfolio.

So, I see some momentum there. I see people's numbers sort of $1 to $4 more in the average revenue per SKU, but we have no idea what those numbers are yet. It's a nascent part of the business.

In terms of online downloads, similar answer. This market barely existed a few years ago, it barely existed at all. And we're starting to see with a hit like Saints Row if you get any kind of a attach rate with that, you can start to drive some meaningful revenues. The other thing I hope people understand is the revenue part of the equation is not the only part, it's the margin. There's no cost of goods sold, there's very little incremental expense to both in-game advertising. So, not only do we look at it as a revenue opportunity, the real win there is the margin upside because of the expected flow through from both in-game advertising and online.

Heath Terry - Credit Suisse

On that point about margin, can you talk about the different parties that you're having to share this incremental revenue with to the extent that there are any? Whether it's Microsoft on the downloadable content for 360 or your licensing partners when there's in-game advertising in those type of games. To what degree does that start to eat into that margin?

Brian Farrell

As you know, let's talk first about Microsoft's portion. Microsoft doesn't take a portion for their Xbox Live service. So, we're not breaking any new ground there. You can note from the games we've talked about, they are all owned IP and some of the discussions we're having is with our license partners as to what that cut between the game maker and what the license holder should be. So stay tuned, but we are in those discussions now.

Heath Terry - Credit Suisse

Great. Thank you.

Operator

Our next question comes from the line of Evan Wilson - Pacific Crest.

Evan Wilson - Pacific Crest

Thanks very much. A couple of questions. First, could you give us a little more detail surrounding the operating margin you're looking at in the December quarter? Just drill down on what you think the legal fees are going to be, the increase in legal fees year-over-year. And also, what line items you think are going to be materially greater as a percentage of sales, because the guidance clearly implies a lower operating margin year-over-year?

The second would be your expectations for capitalized software at the end of this year. You talked about all the stuff in the pipeline for PS3, PSP next year. And then also, what are your expectations on pricing, not for just the next-gen stuff, but for PS2 this holiday season? Thanks.

Ed Zinser

I'll take the operating margin question first. In our December quarter, we're looking for mid-teens operating margins. I think you'll find that will be pretty consistent with what we gave as far as an EPS number and our net sales number as you work the math through. That was like a nine-part question --

Evan Wilson - Pacific Crest

That was three questions.

Brian Farrell

Cap software at the end of the year?

Evan Wilson - Pacific Crest

Yes.

Ed Zinser

Our cap software number is obviously going to continue to increase in a growing business as we ramp for significant growth next year and the year after. That asset balance will continue to increase, obviously at a much lesser rate than it has over the past year.

Brian Farrell

And then on pricing, Evan; specifically on PS2, consistent with our previous remarks, we will see, we believe, stratified pricing on PS2. I think you'll see a premium price on a select few titles at the $49.99 price point. I think you'll see mass market real hits at a $39.99 price point, and I think you'll see a lot of activity at the greatest hits pricing point of $19.99. What we've seen with pricing so far this year has been very consistent with our expectations and we're not seeing anything different in the marketplace as we go into the holiday season.

Evan Wilson - Pacific Crest

Great. Can you touch specifically on trying to quantify the legal expenses in the December quarter?

Ed Zinser

We're obviously expensing those along the way. They're not going to be insignificant. On the full year, we're certainly looking at least a few cents in legal expenses. Obviously we'll know more as we get a little further in the year, but that's kind of our thinking right now.

Evan Wilson - Pacific Crest

Great. Thanks very much.

Operator

Our next question comes from the line of Edward Williams - BMO Capital Markets.

Edward Williams - BMO Capital Markets

Good morning. Just a couple questions for you. Brian, looking at the development costs for the 360, now that you've got Saint’s Row done, what are your thoughts with regards to second generation games for next-generation systems? How much of an improvement do you think you can realize on the development costs?

Looking within the studios, what is your longer term goals with regards to either moving jobs overseas or outsourcing more of the work towards lower cost areas? How might we see that strategy evolve?

Brian Farrell

On the first part of your question, Edward, I'm not sure this generation is going to be any different from prior generations where all of us make significant investments in our engines and technologies and tools early on and then we leverage those throughout the cycle. That's going to happen. What's probably not going to happen is that you see development costs go down, but you're going to continue as we've seen in prior generations, people keep raising the bar with product quality.

So what does that mean for THQ? I think that puts us in a bit of a competitive advantage because our portfolio, taking Saint’s Row, for example, that kind of a groundbreaking technological showpiece does cost a lot of money, but you can see what happens in the sales results. When we look at another part of our portfolio, things like WWE, MX are very, very solid performers, but are not necessarily based on groundbreaking technology are a different level of spending. And then our mass-market brands certainly don't command the level of spending of something like a Saint’s Row.

So, when we look at our portfolio, we're glad we don't have to make the huge investment in all of our titles that maybe some of our competitors may have to make. So, we think we're pretty well positioned competitively.

The other thing we've been and I think we have been a leader and the second part of your question is this group we formed internally called XDG, we've actually centralized all of our outsourcing. I mean, we are outsourcing a fair number, for example, I think about 20% of Saint’s Row was outsourced overseas and this group centralizes all of that and they're sort of a repository for two things. One is what talent is available in what areas and what cost? The second thing we're building is this library, if you will, of assets that can be leveraged across our studio system.

So, it feels like we're ahead of the curve in terms of cost saving opportunities, and I think the cost savings are to come from things like XDG and outsourcing and not necessarily from cutting cost on titles later in the cycle.

Edward Williams - BMO Capital Markets

Taking a quick look at THQ Wireless, where are you with evolving that business and the changes that you're trying to make in calendar 2006 or fiscal '07?

Brian Farrell

I think we're midway through our plan as we've talked about over the last quarter or two of realigning the product line in our wireless portfolio to a lot more casual games, so I'm pleased with that progress. It's great to have the new deal that we have with Disney and Pixar, we do have wireless rights in our go-forward deal with Disney and Pixar. So adding a strong title to the portfolio I think should help jump start it. So, I think we're about midway through the realignment of wireless, and I actually like that business a lot and we intend to be a leader there.

Ed Zinser

As we normally do, Edward, on our next earnings call, when we give guidance for next fiscal year, we'll include guidance for the wireless business as well.

Edward Williams - BMO Capital Markets

Okay. And so, last question on a similar topic, with downloadable revenues, how significant do you think they could be whether or not it is done on a THQ level or macro level looking into calendar '07 or beyond? You had made the comment that you were targeting growing at the same rate of the market or faster. How much does downloadable revenue affects that growth rate?

Brian Farrell

Very negligible. As I said before, the revenue is just starting to grow, so the big thing is, let's say you can generate $3 million to $10 million from this kind of a business, the impact on a company our size on the revenue line is very small. But if you bring down a significant amount of that to the profit line, that that gives you a lot more leverage. That's the real key takeaway.

Edward Williams - BMO Capital Markets

Okay. Thank you very much.

Operator

Our next question comes from the line of John McPeak - Prudential. Please proceed.

John McPeak - Prudential

Thank you very much. Congratulations on the quarter, guys.

Brian Farrell

Thanks.

John McPeak - Prudential

With respect to PC games being ported specifically to the 360 platform, because I think there are some commonalities with respect to the underlying operating system code. They demonstrated at their analyst day someone playing Halo on a Vista PC against someone playing Xbox 360 over their network. Is there an opportunity for you to take some of the titles you have, particularly like a Company of Heroes and get some leverage by extending that to the 360 platform?

Brian Farrell

That's a really good question. It's something we have been working a fair amount on here internally. Yes, getting titles from PC on to 360 and even back from 360 to PC, because the technologies are so similar is really not the major issue. The real issue is what type of game is the game player for that particular platform, what is the demand for that type of game? Company of Heroes, as you know, is a real-time strategy game, and that style of game historically has been very popular on the PC and has had a negligible popularity on the consoles. So, it is really not the technical ability of us to port it over to the 360, but the issue is what is the market opportunity of RTS on console?

There are a couple of titles that are experimenting there. The numbers are okay. But if you look at other types of products, if you get into first person shooter, and like Halo, your specific example, FPS work on console and PC. So, you just have to be mindful of the genre.

John McPeak - Prudential

Okay, thank you.

Operator

Our next question comes from the line of Arvind Bhatia - Sterne Agee. Please proceed.

Arvind Bhatia - Sterne Agee

Good morning, everybody.

Brian Farrell

Good morning Arvind.

Arvind Bhatia - Sterne Agee

I would like to add my congratulations as well. Brian, I know your pipeline next year, you talked a little bit about it. Is there anything big or are there big titles in the pipeline that you have not announced, or is the mix full of a lot of singles and doubles that have not been announced?

If I can ask the question on the arbitration issue, is there any update, or if not, when should we expect some sort of resolution on that issue?

Brian Farrell

On the first part, the way to think about the business next year is we've got our WWE business as you know, we're adding a title this fall to grow the business by adding 360, and we'll add the PS3 next year. So, we're expecting growth in the WWE. Pixar, we're adding Ratatouille to the portfolio next year as well as Cars 2. Nickelodeon, we'll continue to grow that business as we add new platforms. As you know, we've just established new properties with Saints Row and Company of Heroes and have not announced sequels, extensions, to either of those on new properties.

The titles I really like for next year are Stuntman, Juiced, and Front Line: Fuel of War. We are going to be hosting a studio tour next week in New York to show Front Line in depth and some of you may get to see it, but I personally like that title a lot. So, there are titles that are unannounced. I don't want to characterize them now as singles or doubles or home runs.

But the way to think about growth next year is to think about growth in the core brands, extending the brands we already own, and then a couple of new brands that we think are pretty promising and we'll be showing you more next week.

With respect to the Jack's situation, really no update there. We are in alternative dispute resolution mode. How long that will take, I really don't know, but it's in process now. So, and again, when it's complete, we'll update you.

Arvind Bhatia - Sterne Agee

Shouldn't affect the numbers this year at all, right?

Brian Farrell

We really have no way of knowing right now, Arvind. Obviously there's a difference in point of view and we'll see how that turns out.

Arvind Bhatia - Sterne Agee

Okay. Thanks, guys.

Operator

Our next question comes from the line of Tony Gikas - Piper Jaffray. Please proceed.

Tony Gikas - Piper Jaffray

Hi, good morning, guys.

Brian Farrell

Good morning, Tony.

Tony Gikas - Piper Jaffray

Do you have to pay Jack specific in the interim here?

Ed Zinser

Actually, we don't plan to, no.

Tony Gikas - Piper Jaffray

Okay, good. A couple questions. The Xbox Live network is very robust. It seems to be well ahead of the PS3 network. What have you learned in the last few months as we get closer to the launch? Does that look like it's going to be a fairly in-depth model initially and my understanding is that the download opportunities really don't kick in until the second half of '07, is that how you guys see it?

Ed Zinser

We've been hearing similar things, Tony. There's a lot of things I think Sony is continuing to refine their online and download model, but I think the way we look at it is, early on with the fairly limited installed base, as with all launches, if you look back at all the launches in history of the business, they tend to be fairly light. I really don't think it's going to be a meaningful opportunity until mid-year next year anyway. I think Sony has time to really put the finishing touches on that whole download model.

I think if you look at the opportunity on Xbox Live, I think everyone is realizing there is truly an opportunity there.

Tony Gikas - Piper Jaffray

Do you think in time it will be as robust as Xbox Live?

Ed Zinser

I'm sure that's Sony's goal and it would certainly be our hope as well. It's clear from Xbox Live that players want to play online. Customization is such a huge part of what's going on I think both culturally and in gaming. So given that trend, it is natural on all platforms including the Wii. So, I would presume that all platform holders would do everything possible to take maximum advantage of it.

Tony Gikas - Piper Jaffray

Okay, couple more. It looks like sales and marketing was down in the quarter. This was a trend we saw with one of your competitors as well recently. Should we expect that to continue? Is this a one-quarter item?

My last question, just want to get an update on porting product. Are you porting any video games yet from the 360 to the PS3 or vice versa, or has this all been incremental expenses that you're incurring, doing the same brand on multiple platforms to date? I guess if you're not porting yet, when do you think that starts?

Brian Farrell

Okay. Lots of questions there, Tony. On the sales and marketing, I'll let Ed drill down a little bit, but from my perspective, I think I want to make sure everyone understands, we're delighted about -- we invested heavily in sales and marketing this quarter launching both Saint's Row at the end of August, so a lot of spending hit this quarter and Company of Heroes was heavily marketed.

The fact that we got the leverage we did on the revenues I think is the point, not the spending level that we really drove upside in the units from our marketing spend and I think that was a huge win for us.

Ed Zinser

As far as the full-year marketing spending goes, we're about flat as a percentage of sales to last year that we've guided to. With an 18% revenue growth planned for this year, we're obviously spending a lot more dollars, but you're obviously seeing some leverage on that particularly in Q2.

Brian Farrell

In terms of cross platform, we're going down a couple of paths. We have some of our own internal proprietary engines and technologies that are cross-platform technologies. So, it's hard to call those direct ports. We do have cross-platform tools internally that we're using to go from PS3 to 360 and vice versa. A couple of our products are using the unreal platform that does have some cross-platform solutions. So the answer is, you'll see some porting. But because the development environments are so different, I think what you'll see is a lot of shared art assets. If you want to call that a port, I don't call that a true port with the code being written specifically for the two different systems.

The bigger picture thing to think about is where we put our brands, we're looking more at PlayStation 3 and Xbox 360 at the higher end of the age demographic of our brands with Nintendo Wii being more of those in mid and lower end. So that's how we're thinking about the marketplace. We're not porting every product across all three platforms. We're trying to be very strategic about what games we put on what platforms and when we do it.

Tony Gikas - Piper Jaffray

Will porting ramp up over the next few years to what it was in the first two years of the PlayStation 3 cycle, or will we just not get there this time around?

Brian Farrell

It depends on how you call porting. You'll see a lot of simultaneous cross-platform development between 360 and PS3. We will be doing that.

Ed Zinser

I guess, I am trying to get out is that, are we going to see the same level of cost savings from being able to port, whether it's the artwork or the technology looking forward, or are going to have higher expenses on a per platform basis, because that could have an adverse effect across fewer hardware units out there, particularly in the first couple of years.

Ed Zinser

Going cross platform like this is a huge cost saving opportunity, similar to last generation's.

Tony Gikas - Piper Jaffray

Perfect, thanks.

Operator

Our next question comes from the line of John Taylor - Arcadia Investment Corporation. Please proceed.

John Taylor - Arcadia Investment Corporation

Hi good morning.

Brian Farrell

Good morning.

John Taylor - Arcadia Investment Corporation

I've got a couple of housekeeping questions. As you guys are talking about owned IP and internally developed games and stuff, I wonder if you could give us what the Q2 looked like for both those categories versus Q2 last year? Was there anything going on with the royalty line, because I was thinking maybe we might have a little bit more leverage on that particular line than we got? That's the first question.

Could you talk about the amortization of development cost on Company of Heroes and Saint's Row, how much of the total cost was on the balance sheet that has been taken off on those two?

Last question. Brian, I wonder if you can talk about bundle opportunities. It sounds like Microsoft may be looking to offer something to retailers, with these titles, I wonder if you can maybe you can get a Cars 360 deal out there somewhere for holiday. Thanks.

Brian Farrell

A lot there. While they're looking up some of the other things, in terms of the royalty lines, we had 2 million units of Cars in the quarter. So that's going to be a big driver of the royalties you see in mid-Q2.

With respect to bundle opportunities, we work very closely with all of three hardware guys for both co-marketing and bundling opportunities when they're available. As you know, with Microsoft's stated strategy of getting mass markets sooner in the cycle, our portfolio of games is very appealing to them. I'm really not at liberty to talk about what we might do with them over the holiday season and beyond, but you can be assured we're talking to them about opportunities that can both help Microsoft and THQ.

Brian Farrell

As far as our internal and external development in licensed and owned, as we've talked about for the full year for this year, we're looking at a little over 20% owned going to 40 next year. If you look at this quarter in particular, to your question, obviously we had a pretty strong mix of owned this quarter with strong performances from Saint's Row and Company of Heroes. So we are north of 30% coming from owned IP in Q2, and that's even with a very strong performance from Cars and Monster House.

Similarly on the internal development side, we've targeted for next year about half of it coming from internal development, about 40% for this full year, and you'll see about a comparable mix probably in the 30s or so this quarter, actually more than that. certainly north of 40, probably over 50 coming from internal development this quarter because you had Cars, Saint’s Row, and Company of Heroes all being very strong properties if the quarter, all internally developed. So we're north of 50% this quarter for internal development.

John Taylor - Arcadia Investment Corporation

Great. And in September last year, you had Destroy All Humans, and a couple other things that you owned as well. Was there much delta in the owned IP line September versus December?

Ed Zinser

In terms of owned IP last year as you mentioned, we had Destroy All Humans was really the top owned IP and Juiced. We had some Juiced products and most of the rest were licensed properties. So, there is a pretty significant increase in owned versus last year.

John Taylor - Arcadia Investment Corporation

There is. Okay. Thank you.

Operator

Our next question comes from the line of Lowell Singer - Cowen and Company. Please proceed

Lowell Singer - Cowen

Thanks. Two questions. Brian, I'm wondering if you can talk about your plans for moving forward on PS3 [inaudible]?

Second, on the Pixar side, obviously Ratatouille next year. What are your expectations for the subsequent years? I believe under the contract, you have the right to original films with sequels theoretically up for negotiation, but you don't control those, so I'm wondering what the pipeline looks like beyond 2008?

Brian Farrell

Okay on Saint’s Row, as you we know shipped Saint’s Row Xbox 360 and we'll discuss more about our Saint’s Row franchise plans on our next call. We're not prepared to talk about that today.

With respect to the Pixar deal, just to be really clear and hopefully somewhat repetitive. Our rights are for the next four wholly-owned Pixar films. As you know the next one is Ratatouille that comes out next summer. We are in development on the calendar 2008 Pixar film. Obviously we're not going to announce their films, the timing or the names, but we are actively in development on that film, so we have visibility through at least calendar 2008 now.

Lowell Singer - Cowen

Okay, thanks.

Operator

Our next question comes from the line of Elizabeth Osur - Citigroup.

Elizabeth Osur - Citigroup

Thank you. I had two questions. One thing that we haven't heard much about from anyone in the industry is Wii exclusive product, but it seems like it would make a lot of sense in particular with your content portfolio. So first question, could you comment on that?

Second question, in the past you've been very helpful in outlining how you get to your growth forecast going forward, and I know you're not providing an exact growth forecast for next year, but I guess, I'm understanding your comments to be an industry level sort of growth. Could you walk us through the growth you see on the corporate portfolio minus the Car's gain and Saint’s Row to get the revenue growth for next year? Thanks.

Ed Zinser

In terms of any exclusive titles, including Wii, and we agree with you it's a great opportunity for some exclusive titles just because it is such a unique platform. The exclusive is always a matter of economics. What are the development costs by going on a single platform versus going across platform? We are looking at some Wii exclusive properties, but there's nothing we can announce at this time. We're really pleased with the ramp of our four titles on Wii at launch and the stuff we have in our pipeline into fiscal 2008.

With respect to our growth plan, I think I outlined it a moment ago, if you look at, for example, brand by brand adding PS3 to WWE you should provide some significant growth. Ratatouille should comp Cars, and then you add Cars 2. In the Nickelodeon property, we'll be adding more of the next gen SKUs as we get heavier into next gen on our Nickelodeon lineup. And then adding to the portfolio next year, Frontline, Juiced, and Stuntman, those are just the ones we've announced, I think if you run numbers on those, again we haven't commented on any of our plans for Saints Row, so, there's a lot of things we've not been talking about. If you run the math on what we've laid out, I think you could see that it bolsters at least our confidence in the fact we can continue to grow at or above market rates.

Brian Farrell

We'll give more visibility as well on the next call. We obviously have a very detailed bottom's up plan that fully supports the at or above market rate growth for next year.

Elizabeth Osur - Citigroup

Okay, thanks.

Operator

Our next question comes from the line of Mike Hickey - Janco Partners. Please proceed.

Mike Hickey - Janco Partners

Thanks for taking my call. Great quarter, guys. Curious on the Saint’s Row online download, I think you said about a 10% attach rate that. That seems kind of low. Is that within your expectations and maybe if you can give us a little bit more color on that.

Fiscal '08 on the mass market side, what should we be modeling in terms pricing? Are we still thinking $40 price points or are we going to have to push that down?

Ed, I think you said, you didn't see fiscal '08 necessarily being anymore competitive than any other year, but of course we have GTA 4, we have Halo 3, we have Spore, we have some of the biggest franchises of all time launching. That's got to impact to some extent your strategy, I would think.

Maybe if you can touch briefly on your guidance. It looks like you guys are tracking about $0.30 ahead non-GAAP for the first half of the year and only pushing up your year end guidance by $0.05. Are you just being really conservative? In particular your Q3 revenue guidance is pretty much in line with The Street, but your EPS of $0.69 to $0.74 is pretty much conservative, below what The Street is looking for at $0.97. What do we have to push down on to get the operating margin that low?

Brian Farrell

On the downloadable, we really didn't have anything modeled for the downloadable. We just didn't know, we are actually delighted, remember we just started in September, so in about 30 days to get 50,000 downloads is actually surprising us on the upside, remember this is a brand new market. So given the fact that we're getting almost all net profit on something we had very little modeled in for, I think is pretty positive for the industry in general. I'm not sure I had all the notes of the other questions.

Ed Zinser

In terms of our guidance, I guess for the full year relative to the first half year, as I said earlier there's several things, obviously we had a lot of upside versus guidance in the first half. We had some benefit in Q2 versus Q3 by moving Bratz up to correspond to a toy launch as well as stronger Saint’s Row earlier on that we had expected. We've had some incremental legal expenses on the full year and there was one title we moved out, GTR. Those all contributed to us flowing through a nickel of increase to our range on the full year.

With respect to the operating margin in Q3, as I said, we're looking for mid-teens operating margins in the quarter. I think if you look at us relative to the competitive set, our margins are going up this year on the order of 4 plus points versus last year. So, I think on a margin basis for fiscal '07, we actually look pretty good.

Brian Farrell

And finally, Mike, as to your competition question, if we look back in the prior year cycle, not only do we compete against Halo, GTA, you mentioned SPORE I mean, that looks nice, but I'm not sure it's an established franchise yet. We've competed and we've won. If you look at the trend in our game rankings, they are staggeringly competitive. Not only do we intend to but we believe we are competing with the best and we're winning. So I respect all of our competition, but I think they are respecting THQ and our abilities to compete even more and more. So, the marketplace is always competitive. If you look back at the 11 years, we've grown every consecutive year. So, we're not cocky, but we're highly confident.

Mike Hickey - Janco Partners

Okay. And then on mass market pricing next year Pixar content and it sounds like you guys are thinking Saint's Row here is a franchise that can compete with GTA, and certainly you've had success upfront. Is that something that we should expect to fill in the space between a GTA launch? It seems like you're kind of coloring that, we should see a Saint's Row 2 next year or at least a PS3 version?

Ed Zinser

With respect to pricing, we will talk a little bit more about some of our assumptions on our next call. I think as we've said, we expect to see premium pricing on the new hardware continue. As far as pricing on devices like the PS2 console, it's just been very strong. I mean our sales this year have been very strong on that platform, prices have held pretty well. So, we're not expecting to see any dramatic changes there, but again, we'll give more specificity to that on our next call.

Brian Farrell

Let me add to that Mike. Just looking historically, we have a lot of experience with pricing in current generation after next generation launches. If you look, just look at the data historically and on the top stuff like we own or control, that stuff tends to hold. But again, just don't take our word for it, look historically.

Mike Hickey - Janco Partners

Okay.

Brian Farrell

I think we have time for one more question.

Operator

Our next question comes from the line of Jeetil Patel - Deutsche Bank Securities. Please proceed.

Jeetil Patel - Deutsche Bank Securities

Great, thank you. Hi, guys.

Brian Farrell

Hi Jeetil.

Jeetil Patel - Deutsche Bank Securities

One question actually, pretty straight forward on the Playstation 2. You're exposed there by 35%, 40% doing extremely well at this point on the PS2 in terms of the resurgence.

One, why do you think all of the sudden, the PS2 software sales picked up, which it seems to be a phenomenon in the past four to five months?

Second, as you go forward, broadly in the industry going forward, I guess, do you think that the PS3 ramp will overcome the decline or the transition in the PS2 category as you look at a calendar '07 timeframe?

Brian Farrell

Yes, with respect to the PS2 marketplace, I think all of us have been very pleasantly surprised by the strength of it there. As for the reason, Jeetil, I'll hazard a guess. If you look at what Microsoft has done with the original Xbox, as you know, they were cost challenged. So they had a hard stop to that platform and really ceded the lower end of the market, the sub-$129 market to Sony. Nintendo's been emphasizing the Wii. Historically, Nintendo has gone very quickly hard stops on their consoles over the years too.

So, it's really Playstation that owns that sub-$129 market. So, the fact that there is only one console being heavily marketed with a lot of new games to that market, to the Wal-Mart crowd, if you will. I think that's a very strong strategy. If you listen to Sony, they think the PS2 is going to be around a long time and we agree with that if you look at our lineup for PS2 this fall, we've certainly invested our capital that way.

Going forward, it's not just the PS3 substituting for the PS2. I think it's Wii and 360 and PS3 really are filling in the hole as PS2 and Game Cube starts on their downward slope because as we said, Xbox has already done that. So the way we look at the market, it's not just PS3 replacing PS2, but it's all the high-end consoles moving forward with PS2 probably being the strongest of the current gen.

Jeetil Patel - Deutsche Bank Securities

Just a quick follow-up. How would you characterize the next-gen ramp-up at this point? Is it in line with what you would expect, better, worse just qualitatively?

Brian Farrell

I think it's pretty consistent with what we said all year. It's been ramping I think pretty much consistent with our expectations, so the real question is how quick can all three of these guys ramp, not only through the holiday season, but into next year?

Jeetil Patel - Deutsche Bank Securities

Thank you.

Julie MacMedan

Thank you. That concludes our call for today and we appreciate your attendance.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: THQ F2Q07 (Qtr End 9/30/06) Earnings Call Transcript
This Transcript
All Transcripts