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Farrell: PS3 and 360 price drops have driven market momentum

THQ CEO is however "concerned" about Wii software tie ratio

The price cuts from Sony and Microsoft for their respective platforms have ensured market momentum throughout September, THQ CEO Brian Farrell has said. But he is "concerned" about the software tie ratio for Wii.

Speaking in an investor call following his company's latest quarterly financial report, Farrell stated: "We are encouraged by the hardware price cuts. We particularly like the momentum on the PS3 and Xbox 360 platforms now.

"Wii hardware units sales were up 66 per cent but we are concerned about the software tie ratio for the platform."

He added that THQ's business restructuring had worked in the current, more fragmented market.

"The old formula of getting an IP and porting it to every platform known to man isn't working for anyone in this marketplace," he said. "That's why we re-organised around these business units which allows people to focus on each of the types of consumers rather than particular platforms or products."

Farrell predicted a "cautious" consumer and retail environment for the holiday season, adding that retail was being cautious on its early ordering but was prepared to buy subsequent stock of games that were selling well.

In response to these market conditions, THQ would focus on delivering quality games, strong brand recognition and focused marketing campaigns to consumers, he said.

The company was also investing in Natal and Sony motion tech development, he continued - incentives which he hopes will expand their respective platforms' installed bases into which it can sell product.

"From the bigger picture," he added, "what we really like is that both Sony and Microsoft are making pretty major statements that they intend for this to be a long cycle by broadening the platform's appeal by going very mass market late in the cycle."

THQ's second quarter financials showed a sales drop of 39 per cent on last year. However, operating losses were reduced and the company says it's on target to outperform last year's sales over the whole of fiscal 2010.

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