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UFC 2010 upset forces THQ guidance update

Publisher forced to amend first quarter and full-year outlook after new game sales disappoint

THQ has revised the guidance for its first quarter and full-year year finical results, following lower than expected sales for new game UFC Undisputed 2010 and a strengthening US dollar.

Released at the end of May in North America and Europe, UFC Undisputed 2010 was expected to follow the breakout success of the previous UFC title. However, despite similarly high critical praise sales have disappointed and THQ has been forced to adjust its projected sales figures.

Net sales for the three months ending June 30 are now predicted to be between $144 and $165 million, rather than the previously predicted $190 to $200 million. This will create a loss per share of between $0.20 and $0.30.

Full year results are now expected to see net sales of between $845 and $865 million and a "roughly breakeven" earnings per share figure. Previously the company had predicted sales of between $905 and $920 million and earnings of between $0.25 and $0.30.

"UFC Undisputed 2010 is a high quality game, with a Metacritic score of 85, based on the tremendous UFC brand. Pre-orders were up 50 per cent over last year and we saw strong retail and consumer demand for the title coming into launch, resulting in shipments of 2.6 million units to date," said THQ president and CEO Brian Farrell.

"Unfortunately, total sell through to-date has been below our expectations and prior-year results. We will continue to drive demand through a strong marketing campaign and by working with our partners at the UFC, including the upcoming July 4 UFC 116 event featuring our cover athlete, Brock Lesnar," he added.

The relative failure of the game sales has been viewed as surprising by many, with the unexpectedly high success of Red Dead Redemption - which was released just a week earlier - being blamed by some for adversely affecting sales.

UFC Undisputed 2009 was widely acknowledged as a key catalyst for THQ's recent turnaround in fortunes during its 2009 fiscal year. The title has sold over 4 million units, with the game's producer recently emphasising the importance of a high quality product.

Despite the unexpected setback from UFC Undisputed 2010, THQ is continuing its restructuring plans, with new senior management promotions announced last week and the streamlining of the company into just two key business units.