THQ extends Nickolodeon deal to 2010

Publisher THQ has announced that its licensing deal with Nickelodeon has been extended through to 2010, ending speculation that valuable properties such as Rugrats and Spongebob Squarepants could end up at Midway.

The extension of the Nickelodeon master license is a crucial deal for THQ, which saw around 16 per cent of its revenues last year coming from various Nickolodeon properties, and grants the company the ability to develop products based on several new franchises.

The signing of the deal will take some pressure off THQ - and particularly off its stock. There had been widespread speculation that Nickelodeon might choose Midway as a partner when the existing THQ agreement expired next year, based on the development of a relationship between Midway and Nick's parent company, Viacom.

Viacom chairman Sumner Redstone is Midway's majority shareholder, and has talked in the past about cultivating a relationship between the game publisher and the media empire - indeed, along with the announcement of the new THQ deal, Viacom also made the unusual step of releasing a statement to say how "impressed" the company is with Midway's abilities, and is hoping to work with them in future.

THQ has been working on Nickelodeon titles since 1998, and has enjoyed significant success with the various brands covered by the master license. The company plans to extend its Nickolodeon line-up with the launch of new titles based on franchises including Danny Phantom, EverGirl and The Barnyard Movie in the future.

The news of the Nickelodeon extension solves one of the problems which had been facing THQ; however, another problem is still looming, with the company's other major source of licensed property revenue, WWE, announcing last week that it was suing THQ and partner Jakks Pacific and seeking termination of its valuable wrestling license.