Barbie, Hot Wheels, and even Rock 'Em, Sock 'Em Robots will be given gamer makeovers by THQ. It won't be just consoles and handheld gaming units, either. This deal covers mobile apps, computer software, and even social games on Facebook.
THQ can use the boost. It's coming off back-to-back quarterly deficits, and analysts see the gamer posting a small loss in its fiscal year ending in March.
Larger publishers Activision Blizzard
THQ's weakness is that it has largely relied on licensed properties for its games. It's a strategy that provides instant brand recognition, but often at the expense of lower margins since the intellectual property owners take a generous cut. Obviously, this Mattel deal is yet another licensing deal, but THQ's approach appears to be that it can make up any shortcomings in volume.
It will be interesting to see what THQ does with this deal. There have been plenty of Barbie and Hot Wheels video games cranked out over the years. Given the subject matter, it's not really a surprise to see that the games are usually simplistic titles geared toward the younger set. If THQ is going to go down this same path, why bother? The real challenge would be to attempt an updated reboot. Rival Hasbro's
Can THQ help Mattel perform a similar feat? There will have to be broader appeal if THQ wants to crank out Mattel games on social networks that block out kids and preteens. There aren't too many toddlers with smartphones, either.
If THQ is aiming high, this deal will pay off handsomely.
Can Mattel work as a gaming clay for older gamers? Share your thoughts in the comment box below.
Take-Two Interactive Software is a Motley Fool Rule Breakers recommendation. Activision Blizzard and Hasbro are Motley Fool Stock Advisor picks. Motley Fool Options has recommended a synthetic long position on Activision Blizzard. Motley Fool Options has recommended writing covered calls on GameStop. The Fool owns shares of Activision Blizzard, GameStop, and Take-Two Interactive Software. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
Longtime Fool contributor Rick Munarriz loves playing video games but he doesn't own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.
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