THQ Inc (THQI) 3Q:08 Results

Every year they do this. Gigantic guidance for the December quarter that they miss by a mile. The big problem at this company is their hit products are inevitably the ones they have to pay big licensing fees to produce. I'm talking about the Disney games mostly. They pay way up for the rights and generally sell a few hundred thousand units on the strength of the images on the box cover. But there's no sustainability in those games. There's no ongoing stream. Once the movie fades from the box office, the games turn into unsold inventory.

This is not a stock to buy. If you need to play this sector, go with Activision, which is set to continue to dominate the category with the Guitar Hero and World of Warcraft franchises.