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Sega, THQ to Co-publish Handheld Video Games
Six of the games for the Game Boy Advance are already in development and will be released by March 31, with the other 10 titles to be jointly developed by the two companies over the life of the deal, THQ said.
Nintendo Co. Ltd.'s Game Boy Advance, released in June, is the newest and most powerful in Nintendo's handheld line, which controls over 90 percent of the market. The games will all be based on existing Sega franchises, including the "Sonic the Hedgehog" character and the "House of the Dead" series.
"This is a way for both companies to make more revenues and profit from this market," said said Brian Farrell, chief executive of Calabasas Hills, Calif.-based THQ.
Sega announced in January it would abandon the hardware market and cease production of its Dreamcast video game console in favor of becoming strictly a software publisher.
DIFFERENT CHALLENGES
The company has since decided to focus on titles for the two new game consoles, Nintendo's GameCube and Microsoft Corp.'s Xbox, as well as Sony Corp.'s PlayStation 2, said Peter Moore, president of Sega of America, in an interview.
"Clearly we have some different challenges in the marketplace than any other third party," Moore said. "There's no way we would've been able to monetize this content" for handhelds without THQ's help, he said.
Moore declined to comment on the exact revenue split under the agreement but said "we have the content, THQ has the expertise (and) there's a royalty (that's) going to be payable to Sega on this."
Sega's own foray into handheld game devices and games, the GameGear, came and went in the early 1990s without achieving wide market acceptance. Both companies said they were optimistic for the industry's prospects for the holiday season. The video game industry, which has been having a strong year financially, has been expected to have a banner holiday sales season.
While the World Trade Center and Pentagon attacks on Sept. 11 led some people to suggest that consumer spending would be negatively affected for the holidays, both THQ and Sega said they were not seeing any negative impact.
"We are seeing no slowdown in orders ... business is actually very strong in our category," Farrell said. "Industries such as ours ... tend not to suffer" in situations like this, Moore said.
SOURCE: Reuters
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