Investor Presentation

Investor Presentation November 2011 Safe Harbor Certain statements made during this presentation may be deemed to constitute forward-looking statem...
Author: Allyson Ford
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Investor Presentation

November 2011

Safe Harbor Certain statements made during this presentation may be deemed to constitute forward-looking statements. Such statements include but are not limited to THQ’s discussion of video game console and software growth, financial guidance, estimated release dates, and the potential for online gaming. Actual results may differ materially from those expressed in such statements due to numerous risks and uncertainties, including without limitation, demand and competition for the Company's products, and other risks and uncertainties described in the Company's filings with the Securities and Exchange Commission, including its Quarterly Reports on Form 10-Q and its Annual Report on Form 10-K for the fiscal period ended March 31, 2011, and particularly the discussion of risk factors that may affect results of operations set forth therein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation.

THQ at a Glance  Leading video game developer and publisher in growing global $60Bn market  Positioned for growth Robust line-up of AAA franchises for FY ‘12, FY ‘13 and beyond uDraw Game Tablet for Wii, PS3, and Xbox 360 Increasing digital revenue, including MMO

 Lean cost structure and financial discipline to drive operating margin expansion 3

Our View of the Market  Extended hardware cycle Majority of sales through 2014 from traditional gaming platforms PS3 and Xbox 360 key platforms for CY ’11 and CY ‘12 Kinect™ for Xbox 360® and PlayStation® Move should broaden mass-market audience

 Increasing digital migration Fastest growing market segments are online and wireless Emerging technologies may broaden market

 Consumers want greater control over content Social games and micro-transaction models are emerging 4

Growing Global Videogame Market Opportunity (SW $ Billions)

$72.8 $67.2 $62.0 $57.2


Overall 7.9% CAGR – Wireless/Online 14.9% CAGR Source: PriceWaterhouseCoopers LLP


Focused Strategy Core

Casual and Lifestyle

 Fewer, bigger AAA titles

 Continue to build on strength of uDraw

 1 – 2 original IP games introduced each year

 Re-promote Tablet with new title launches

 Games sequeled every 2 – 2 ½ years

 Holiday 2011 launch on PS3 and Xbox 360

 Build world-class MMO

 Focus on new play patterns (Kinect/Move)

 Partner with the best talent across the industry  Family and social play in the living room

Company  Digital integration of all franchises (DLC, Mobile, Social)  Maintain lean cost structure 6

Grow Online & Digital Revenues 1

Create a digital ecosystem around console games


Create a critical mass of users on Facebook and mobile using branded or THQ-owned content


Create ongoing digital revenue stream with competitive MMO


Continue to drive digital end user sales through existing channels


Recent Developments  THQ continues to partner with the best talent across the industry Patrice Désilets (Assassin’s Creed) Guillermo del Toro (Oscar-winning writer/director) Tomonubu Itagaki (Ninja Gaiden) Turtle Rock Studios (Left 4 Dead)

 Guidance is for biggest December quarter in the company’s history Proven franchises Saints Row, WWE and uDraw


Our Strategy: Continue to Build Strong Franchises Q3 & Q4 FY ’12

FY ’13 and beyond

Turtle Rock Studios - Title TBA

Representative key titles

inSANE - Guillermo del Toro

Montreal Studio Original -Patrice Désilets

Homefront 2 -Crytek


 Most significantly differentiated game launched this holiday season  Day one Metacritic score of 87  1.5M+ unique characters created on Initiation Station  Robust 40-week DLC plan and in-game store for post-release 10

uDraw GameTablet  Globally launched on November 15 for PS3, Xbox 360 and Wii  Toy Insider’s Hot 20 list of most anticipated toys for holiday 2011  Six new software titles in FY ‘12


 Refreshed game design  Return of Brock Lesnar and The Rock  Pre-orders up significantly from last year  Launch date: November 22


Social/Mobile Games

 One of the first next-gen Facebook games with 3D gameplay

 Social version of Mattel’s popular party game

 Available on iPad, smartphones and Facebook

 Available on XBLA, PSN, iPad, smartphones and Facebook

 Targeting January 2012 commercial launch

 Target launch this winter


 First release in almost two years  More approachable game play  UFC brand continues to expand  Features two new weight classes, more fighters and new Pride mode  Launch date: February 14, 2012 14

THQ Target Operating Model

Long-term target operating margins: 8-12%  Build hit franchises  Increase digital revenues  Leverage cost structure


Investment Rationale

Poised for growth

Games have a unique selling position

 Portfolio has never been stronger

 Bold, exciting and fun games

 70% of FY’12 revenue forecasted on PS3 and Xbox 360

 Backed with a competitive marketing spend

 Four-pillared digital strategy

 Partnering with the best talent across the industry

Lean cost structure

 We are positioned to achieve greater profitability


Investor Presentation

November 2011