THQ spending at least $50m on Dark Millennium MMO
Homefront needs to sell 2m to break-even; next two "significant growth" years for publisher
Publisher THQ is to spend at least $50 million on its upcoming MMO Warhammer 40,000: Dark Millennium Online, due for release in the fiscal 2013 year.
Speaking at the Wedbush Morgan conference last night, executive vice president and chief financial officer Paul Pucino detailed the company's roadmap for the next two financial years, where he expects 2012 and 2013 to provide "significant growth" after a year of investment.
"The production budget is high-end of a core game," he said of the MMO. "Somewhere in the area of $50 million or so to get these games to market, certainly in that range for Dark Millennium. What you want is a game like this to be successful and the development budget gets higher."
"It can continue to generate over a long period of time - 5,6,7, 8 years of high operating margins and a significant amount of cash," he said of projected profits.
However, he would not go into any detail on the amount of subscribers the company is targeting.
"We haven't gotten specific yet, we're a couple of years away here from release and certainly as we get closer we'll give some specifics with regards to break-even or target users. "
He also revealed that upcoming first-person shooter Homefront - along with the majority of new owned IP - will need to sell over 2 million units for it to break-even.
"When you just think in terms or profitability, the owned IP, there's a threshold of break-even of about 2 million units per game, so you have to sell somewhere in the area of 2 million copies of a game like Homefront to break even. Once you get past that you're generating incremental operating margins as high as 60 per cent," he offered.
The publisher sees the Xbox 360 and the PlayStation 3 as key formats for growth over the next three years, with THQ planning to introduce 1-2 new games each year, with sequels to games every 2-2.5 years.
It's U-Draw tablet will see first-party software released every 3-4 months to "re-promote" the peripheral, and it now expects to sell 1.7 million units for the fiscal 2011 year.
Pucino said that historically 60-70 per cent of the company's profits have been from licensed IP, but with a renewed push in owned franchises, getting an even 50-50 split "would be something very appealing to us."
From GamesIndustry.biz Recommendations by Taboola