THQ's digital revenue set to double next year
MX vs ATV Alive could be a "wildcard" as uDraw production is increased on retail demand
THQ has revealed that the revenue it generates from digital sales of products doubled between its last fiscal year and this one - and is set to double again for next year.
But while digital revenues are still the minority by a wide margin, he believes that the release of MX vs ATV Alive in 2011, with a DLC strategy that could see the average revenue per user figure end up being higher than the traditional boxed price alone.
"It looks like our digital revenue will about double this fiscal year from last fiscal year - and about double again next fiscal year," said CEO Brian Farrell on a call to investors, following the release of the company's Q2 2011 financial results.
"That's across a broad spectrum of areas - a lot of it is downloadable content on our key franchises, and as you know we're also become a little more active on XBLA and PSN, and we have a whole coterie of iPhone and iPad games.
"The real wildcard next year is the experiment, if you will, with MX vs ATV Alive - we think this may be where the games industry is going. You see it in the free-to-play micro-transaction market, where you try and get the user hooked with your experience, and then keep that user engaged by giving them more and more content - and charging for that content.
"It's really hard to break it down as incremental per unit - and I don't think that's really the right way to think about it as we get into this brave new world. The right way to think about it is overall ARPU, and that's what we're trying to drive."
He went on to reveal that while the boxed price will come in at a lower-than-normal $39.99 his belief is that some users could spend more than $100 during the product's lifetime.
Meanwhile, with the launch of the uDraw tablet for the Wii only a couple of weeks away, Farrell also noted that production had been increased to around 300,000 units per month on the back of strong demand for retail.
He declined to comment on pre-order numbers, or specific unit sales targets, but did note his hope that it would prove a significant revenue stream in the long term.
He added that Nintendo had been supportive of the product - both financially and with marketing - and that THQ would make profit on every unit of the hardware sold, at a similar level to the boxed software.
Earlier the publisher released its latest financial results, noting a loss of $47 million in the three months to the end of September 30 - in line with guidance.