Woe is THQ (NASDAQ:THQI)! Microsoft (NASDAQ:MSFT) is scoring with its Halo 3 video game. The Nintendo Wii seems to be allergic to retail shelves and refuses to stay on them. Activision (NASDAQ:ATVI) is salivating at the prospects of its surefire blockbuster hit, Guitar Hero 3.

But THQ is reducing its outlook for fiscal 2008 on the heels of delays and disappointing sales data.

THQ currently believes it will produce GAAP earnings of $0.56 per diluted share for 2008 on revenues of $1.06 billion. Previously, the publisher thought it would do somewhere between $1.34 and $1.44 per diluted share on sales of roughly $1.1 billion. Shareholders can thank a lackluster market response to titles Stuntman: Ignition and Juiced 2: Hot Import Nights for a portion of THQ's troubles.

You can also throw delays involving Frontlines: Fuel of War, de Blob (never mind the name, this is supposed to be a cool title), and the next Destroy All Humans! sequel into the mix of reasons driving the bad guidance. These games will be out in fiscal 2009 instead of fiscal 2008's fourth quarter. Delays always hurt -- just ask Take-Two (NASDAQ:TTWO).

Management seemed to promote its upcoming lineup in the press release to divert attention from the operating missteps, but I have to agree that fiscal 2009 does look like a good one. THQ will release a game based on the Disney/Pixar movie Wall-E next summer, and it will distribute sequels to Red Faction and Saint's Row.

But before you jump ship to Electronic Arts (NASDAQ:ERTS), there are some things you should consider. The company still has a promising library of licensed characters with the likes of Disney's (NYSE:DIS) Pixar properties and Viacom's Nickelodeon characters.

The company also has a healthy balance sheet. As of last quarter, THQ had $6.35 per share in cash and cash equivalents with no long-term debt. In fact, the company's cash position has increased significantly over the past four years.

THQ will recover from this blip in the radar. Going forward, management needs to sniff out less-than-spectacular releases and aim to deliver games on time -- especially in time to grab holiday dollars. Now that Sony (NYSE:SNE) is in price-cutting mode, and Xbox 360s and Wii systems are moving, THQ better grab the bullish video-game industry by the horns and ride it for all its worth.  

We've come a long way since Pong:

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.