THQ Wireless in Jedi Training

A subsidiary of THQ (Nasdaq: THQI  ) , THQ Wireless, announced this week a deal for a powerful license: The company has hooked up with Lucasfilm to bring the Star Wars brand to mobile platforms. Nothing says "high-profile" in entertainment like the adventures of Luke Skywalker and R2D2.

I've covered a couple happenings in mobile-phone entertainment in the recent past. Electronics Boutique (Nasdaq: ELBO  ) is strategizing to capture revenues from sales of video game content to cell-phone users, and Fox (NYSE: FOX  ) is gearing up for a promotion involving its television franchise 24 and the portable devices. I'm fascinated by such moves, mainly because I think it's an incredibly useful way of reaching the more youthful demographics these days since they are always on the go, whether they're hopping from one mall to the next, heading to the local multiplex to see the latest mainstream action flick, or catching up with buddies at the nearby miniature golf course.

Lucasfilm certainly benefits from the agreement, but the biggest advantage lies not in the total value of the deal (whatever that may be) but in the promotional opportunity the deal implies for next summer's Star Wars: Revenge Of The Sith film. THQ Wireless will certainly be riding that bandwagon for all it's worth; even though many agree that the new trilogy has so far been disappointing, any connection to Mr. Lucas' universe is still worth a lot. And the release makes clear that THQ Wireless will not focus solely on the finale of the latest series; every movie is fair game.

THQ is no stranger to this valuable property; the company had recently produced a Gameboy Advance title based on Han Solo's famed Millennium Falcon. And it holds a nice portfolio of franchises that it can exploit, such as the Nickelodeon programs and films from Pixar (Nasdaq: PIXR  ) . Licensing such assets is an indispensable strategy for all video game publishers; Activision (Nasdaq: ATVI  ) and Electronic Arts (Nasdaq: ERTS  ) are masters of this paradigm as well, and all will continue to compete with each other for various rights.

One downside that can occur is a delay in the delivery of the source material -- take a look at Jeff Hwang's coverage of how the decision to move the release of Pixar's upcoming Cars project negatively affected THQ's market cap. Such concerns, however, are potentially short-term in nature, especially considering the fact that THQ is not solely dependent on that one film (although, as Jeff points out, the publisher is not as diversified as an Electronic Arts); long-term investors could certainly disregard such a fluctuation brought on by Wall Street's quick-sell nature. Besides, THQ could perhaps release other Pixar-based games to fill the temporary void (such as a follow-up to the current title based on The Incredibles, if such an idea is contractually feasible). It's more of an issue for Pixar itself, since that company is more dependent on the timely opening of any of the films on its slate (see Rick Munarriz's musings on this topic). Going forward, this sector should offer nice opportunities for investing, especially as the new console cycle approaches.

I hope Master Yoda has his cell phone at the ready so he can download all the neat stuff that THQ Wireless will be producing (and I hope that the planet Dagobah has good cell-phone reception).

Play some more video game articles:

  • Check out the battle between Nintendo and Sony (NYSE: SNE  ) in the portable gaming market.
  • Speaking of that battle, Nintendo has the upper hand, selling one million DS units already.
  • Electronics Boutique's latest earnings made it to the next level.

Activision, Electronic Arts, and Pixar are all selections ofMotley Fool Stock Advisor, a newsletter which, bottom line, is making money for its subscribers. See for yourself by subscribing today with a six-month money-back guarantee.

Fool contributor Steven Mallas owns none of the companies mentioned. He also thinks a scene showing alien traders working the busy floor of a stock exchange would be fun to see in a Star Wars film.


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