SpongeBob SquarePants, please don't leave!
That's probably somewhat representative of what THQ (NASDAQ:THQI) is thinking these days. According to a report from Dow Jones, it is possible that Viacom's (NYSE:VIA) Nickelodeon division may not grant the video game license for its stable of crazy characters to THQ this time around. Nothing's set in stone, of course, but for THQ shareholders, uncertainty is hanging in the air. The current contract with THQ expires at the end of the year.
Nickelodeon's characters are a valuable bunch. In fact, the aforementioned anthropomorphic sponge has been very good to THQ. Ol' Bob has brought his salty sea magic to the likes of Sony's (NYSE:SNE) PlayStation 2, Microsoft's (NASDAQ:MSFT) Xbox, and Nintendo's Gamecube and Gameboy systems. The company says that the title it developed based on the show has sold more than 1.25 million units and is now headed for greatest-hit status, which means that a player can have Bob for a lot lower price -- and that means a higher volume of sales this Christmas season.
You can see what I mean. Whether it be Jimmy Neutron or Fairly OddParents, this license is valuable, as it means a reasonably steady stream of sales for whichever company eventually lands the rights. What complicates the process now is Sumner Redstone's recent action with Midway Games (NYSE:MWY). Speculation that Midway will eventually be the new home for Bob and his buddies cannot be discounted; unfortunately for THQ, it seems to make the most sense.
I think retention of the license is a paramount goal for the company at this point, but the publisher won't be seeing the business version of the Reaper anytime soon if it does lose the negotiations. It holds other valuable licenses, such as the one devoted to World Wrestling Entertainment titles. Still, the Nick license offers a nice advantage over powerhouses Activision (NASDAQ:ATVI) and Electronic Arts (NASDAQ:ERTS).
Too bad there isn't a Saturday Night Live-type sketch program devoted exclusively to market matters. I can imagine the skit: SpongeBob dressed as a tough, Sopranos-like guy, driving a hard bargain with all the potential licensees, all the goofiness no longer apparent in Bikini Bottom's most beloved pineapple-dwelling denizen. That's really what SpongeBob is all about -- he represents nothing less than serious business.
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Fool contributor Steven Mallas owns none of the companies mentioned.
