THQ Inc. (NASDAQ: THQI) has had a decent summer while the rest of the video game industry has seen sluggish sales. And if a partnership with Nintendo (PINK: NTDOY) on uDraw Studio pans out, THQ stock may really be in business. The pricey Wii hardware that comes with the game could bring big revenue to both video game stocks and turn around sluggish sales for the Nintendo console.
So far in 2010 THQ has been cruising along relatively well, with the publisher’s mixed martial arts game UFC 2010: Undisputed seeing healthy sales. UFC joins other THQ published titles like Darksiders in a year that’s been heavier than usual on mature content targeted at the hardcore gamer demographic instead of casual gamers with extra money to spend. Family friendly fare, particularly properties licensed by Nickelodeon owner Viacom (NYSE: VIA), has been THQ’s bread and butter for years. But amid weak consumer spending, THQ has been playing to the cheap seats to mature, male gamers.
That may be changing. It’s the spirit of the company’s family friendly tradition that THQ’s new tablet illustrator peripheral for the Nintendo Wii was announced this week.
The uDraw Gaming Tablet will launch this fall and will include an art tools suite for the Wii called uDraw Studio. The $70 illustrator tablet will ship alongside other games including the classic board game Pictionary and a new product from THQ called Dood’s Big Adventure, an adventure game in the mold of Nintendo’s own New Super Mario Bros. Wii. The 7-inch long, 9-inch wide tablet will cost $70 when it ships for the holiday season and it will be targeted at the 6- to 12-year-old market that has made THQ’s Spongebob Squarepants titles such monumental successes over the past decade.
What will be interesting to see is if THQ and Nintendo look to leverage the uDraw Gaming Tablet as a peripheral for more than just family friendly video games. While Nintendo has consistently downplayed the Wii’s online capabilities, the system does support messaging between consoles, though the tool is not-user friendly and is generally unused by gamers. The Wii also features a proprietary web browser developed by Opera Software. Nintendo and THQ have an opportunity with the uDraw Gaming Tablet to position the Nintendo Wii as a cheap living room web browser that supports tablet-style navigation of the night in the vein of the Apple Inc. (NASDAQ: APPL) iPad. Provided Nintendo developed the software support necessary, THQ’s illustrator tablet could enhance the Nintendo Wii’s role as a media hub for the living room rather than just a devoted game player.
Nintendo has never made their consoles’ multimedia capabilities a focus of their marketing, unlike competitors in the console space Microsoft (NASDAQ: MSFT) and Sony (NYSE: SNE) with their Xbox and PlayStation, respectively. Still, they have made strides in recent years to broaden the multimedia functionality in their machines. Nintendo launched the Nintendo DSi last year, a revision of their popular portable hardware that includes a web browser, a 3-megapixel camera, and the ability to upload photos directly to Facebook. They also began a partnership with Netflix to allow video streaming through the Wii.
Given their recent history, it wouldn’t be surprising to see Nintendo work with THQ to position the uDraw Gaming Tablet as more than just a digital set of crayons. And that could mean big revenue for both these stocks. And with Wii hardware sales slumping in the latest July video game numbers, such a move would be very timely indeed.
As of this writing, Anthony Agnello did not own a position in any of the stocks named here.
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