THQ has revealed how its expansion of uDraw from Wii to Xbox 360 and PlayStation 3 hasn't gone well at all. With 1.4 million uDraw units sat in inventory and sold units shifted at a cut down price, the project is $100 million below expectations.
"Revenues were lower by about $100 million," THQ CFO Paul Pucino said during an investor Q&A last night.
"Where that $100m comes from is we have about 1.4 million units still in inventory that we haven't sold that we planned on selling. If you think about an average price of about $56 or so, that accounted for a shortfall of about $80 million.
"Then the million or so units that we did sell-in we had to sell at a lower price. That, coupled with software sales that are associated with uDraw being lower as well, totals about $100 million.
"From a contribution margin perspective, we would have doubled the profitability in the quarter were it not for uDraw. So it was something in excess of $30 million in operating loss in the quarter as a result of uDraw."
THQ no doubt wanted to replicate the success uDraw had on Wii, where it shipped in excess of 1.7 million units. Mimicking that popularity on Xbox 360 and PlayStation 3 always seemed like a tough challenge, what with the different user bases and the increased willingness of Wii owners to buy numerous peripherals for their console (Wii Wheel, Wii Fit board, Wii Zapper, Motion+ add on).