THQ's Brian Farrell has acknowledged that the market for games based on children's properties is shrinking as more and more company's enter the business.
The publisher's recent Disney/Pixar licensed titles – Ratatouille and Wall-E – have failed to reach the high sales of previous titles such as Cars and Finding Nemo.
"The kids' business, as you know, has been a huge focus of THQ for many years," said Farrell, speaking at the Wedbush Morgan conference, reports Gamasutra. "But there has been a trend away from licensed TV and movie games, and it's become much more competitive for all participants."
"Back when we took the Pixar license on several years ago, Pixar was the only CG animated film company, and now there are several... up to 10 or a dozen CG animated films each year," he said.
"So it's much more competitive – which means that the kids' pie is getting sliced in smaller pieces, which makes it less profitable."
THQ has the rights to publish one more game based on the Disney/Pixar business, due in 2011, but not the upcoming Toy Story 3, which is being developed in-house at Disney.