At first glance, this hasn’t been a great few months for Agoura Hills video game publisher THQ Inc. Its first quarter earnings showed revenues off 12 percent and its operating loss increased to just under $21 million. And last week, THQ disclosed that it had become a target over the growing Securities and Exchange Commission probe of stock option grants. Its Santa Monica-based rival, Activision Inc., was targeted weeks ago.
So what’s the good news? Expenses and total costs dropped about 4 percent, but more importantly, the firm is getting in synch with the arrival of next-generation game consoles. Sales of games based on “Cars” were better than the company’s previous games from Pixar, “Finding Nemo” and “The Incredibles.” When THQ debuts a version of the game that is compatible with the Microsoft Xbox 360 and Nintendo Wii, sales are sure to surge.
THQ, along with Santa Monica-based Activision and Electronic Arts, should see sales rise even further in November when Sony debuts its third PlayStation unit, further ushering in the next generation of game consoles. For months, the video game publishers have suffered as consumers stopped buying games for their old consoles. By the end of the year, the changeover should be complete, just in time for the holidays. For THQ and its rivals, the worst is likely over.
On the Defense
National security is big business these days, and Los Angeles-based Teledyne Technologies Inc. is positioning itself to become a major player.
The company and its subsidiary, Teledyne Brown Engineering, acquired Colorado-based CollaborX Inc., a government and military engineering firm, for $17.5 million last week.
Teledyne is a leading provider of sophisticated electronic components and communications products. It also provides systems engineering and technology for manufacturers, environmental, space and defense applications. The U.S. government is a major customer, with most of that business in the defense realm. Teledyne’s total sales in 2005 were $1.2 billion, around 42 percent of which were to the government, the bulk for defense systems. The CollaborX purchase is intended to build on that success.
Teledyne, which has contracts with the U.S. Navy and U.S. Army, saw CollaborX and its contracts with the U.S. Air Force as a means of broadening its defense base.
“It tends to have a stronger presence with the Air Force,” said Teledyne representative Jason VanWees. “It’s a similar type of work to our core market.”
VanWees said that Teledyne’s primary focus now is developing a massive missile defense system.
“There is one end of homeland security that has to do with a guy with a bomb,” VanWees said. “And there’s another end that has to do with missile defense for the country.”
Adding It Up
Some say L.A. may be challenging Silicon Valley as the epicenter of the tech world, but advertisers here apparently haven’t gotten the word. Conspicuously absent from the June list of the top 50 Internet advertisers, who spent a combined $233 million, were L.A.-based companies. The lone local entry was Walt Disney Co., which spent $2.4 million promoting the film, “Cars.”
Top buyers included Vonage at $13.6 million, University of Phoenix Online at $12 million, Classmates.com at $11.7 million, Cingular Wireless at $8.9 million, Ameritrade at $8.6 million, Scottrade at $8.5 million, Discover Card at $8.5 million, Netflix at $8.4 million, Fidelity Investments at $8.3 million and Monster at $7.7 million.
Other big buyers included Dell Computers, Charles Schwab, Victoria’s Secret, Amazon.com, State Farm Insurance, Thrifty Car Rental, Wal-Mart, American Express and Blockbuster.
Big Break
Joe Bereta and Luke Barats, two film students from Washington, have signed a deal with Break.com to create original content clips. The first of them will be a parody of the Web site Facebook.com and should be out later this month. The duo had earned the attention of Break.com with their Internet shorts “Cubicle Wars 2006” and “Happy Mother’s Day.”
“We’ve given them a blank slate,” said Keith Richman, chief executive of Break.com. Richman said Break.com’s offerings include about 2,500 videos online at any given time.
“We put eight new ones a day roughly,” Richman said, adding that Bereta and Barats’ “Cubicle Wars 2006” has already drawn about 1 million page views.
SpongeBob Ad Salesman?
Through a deal with Viacom Inc.’s MTV music portal, Google is launching a test in which it will insert video from Nickelodeon’s “SpongeBob Square Pants” into targeted ad systems.
If it catches on, Google could allow any number of content companies to use the service, splitting ad revenue with the companies. Google will also experiment with “Laguna Beach: The Real O.C.” and “The MTV Video Music Awards.”
Making the Cin & #233;
Yahoo and Hispanic TV corporation Telemundo have created an online short film festival. Hispanic auteurs can submit two-to-10 minute shorts to Yahoo Telemundo Cine, which was recently relaunched as an online movie channel. The winners, determined in part by online reaction, will see their short appear on the Yahoo Telemundo home page and be broadcast on Telemundo and on mun2, the cable network for young Latinos. Additionally, the winner will get a free trip to the next Sundance Film Festival.
Staff reporter Dan Cox can be reached at
[email protected]
or at (323) 549-5225, ext. 230.
