Two Game Stocks Get Whacked

There's more to video-game stocks right now than the release of the latest sequel to Take-Two InterActive's (Nasdaq: TTWO  ) Grand Theft Auto, but you could be excused if you weren't that interested in the latest quarterly results from Midway (NYSE: MWY  ) and THQ (Nasdaq: THQI  ) .

Midway's first-quarter loss widened to $34 million, or $0.37 per share, from a loss of $19.8 million, or $0.22 per share, this time last year. However, revenue did manage to increase 169% to $29.9 million.

The video-game maker did talk about a variety of new releases, but none of them caught my eye as being well-known games like GTA. Furthermore, Midway's guidance left investors cold -- analysts expected it to report a loss of $0.15 per share, but now it's on deck to report a loss of $0.38 per share. Ouch.

Meanwhile, industry peer THQ got a chilly reception, too. It reported a fourth-quarter net loss of $34.5 million, or $0.52 per share. How times have changed since last year at this time, when the company reported a profit. On the plus side, revenue rose 9% for the quarter.

The games people don't play
I can't say Midway or THQ sound particularly compelling to me as stocks, although even the companies I'd rather consider in this industry -- those with leadership attributes -- have been surprisingly tepid lately. Look at Electronic Arts (Nasdaq: ERTS  ) , with its impressive stable of popular, well-known game franchises. You'd think the console upgrade cycle would already be working on its behalf, right? I know patience is a virtue, but this is getting ridiculous -- I'm looking forward to some fireworks at this point.

Some related companies have been successful for investors, such as those that touch on the videogame industry but aren't necessarily publishers. GameStop (NYSE: GME  ) and Nintendo (OTC BB: NTDOY.PK), which has had great success with the Wii, are a couple of examples.

Investors weren't too thrilled with the latest tidings from Midway and THQ, and I don't blame them for taking their joysticks and going home. I'm also quite eager to see how Electronic Arts fares when it reports earnings next week -- can it start making the industry's performance look as exciting as its games again? I guess we'll have to wait and see.

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