Last week THQ revealed a delay behind one of its bigger titles for the year, Saints Row 2. The publisher cited both marketing and product quality concerns for moving the game to October 14, but Janco Partners analyst Mike Hickey thinks the delay is a sign of larger internal conflict.

"If we have learned anything this year, video game entertainment is increasingly relevant in non-Santa fueled months, with the most recent examples coming from GTA IV and Wii Fit. We expect there is likely an internal conflict at THQ, a corporate / artistic balancing of issues," he noted. "The corporate issue is likely a singular focus on salvaging their fiscal '09 financial performance goals versus an artistic focus on game quality which could be compromised by a development timeline that is likely not pacing original expectations. Ultimately, if the game's quality underperforms the 'franchise's' original release, future iterations of the game could be in jeopardy along with the Company's fiscal '09 expectations. We believe their guided expectations from owned IP in fiscal '09 will prove aggressive given their titles slated for release, weighing too heavily on the success of Saint's Row 2."

You'll notice that Hickey put quote marks around franchise because he ultimately is unsure whether THQ has a veritable GTA-like franchise on its hands.

"We still remember the True Crime (Activision developed game) 'franchise' debacle; a game which initially received strong sales only to be cancelled after the game's follow up release failed in both critical reviews and consumer demand (a relationship with believe is important for core gamers). True Crime's initial release in 2003 scores a 77 metascore for the PS2, while its next iteration in 2005 scored a 60 metascore for the PS2, franchise cessation followed soon after," Hickey said.

He noted that a franchise to him is a title that "represents a predictable level of consumer demand" and that under that definition Saints Row does not qualify (and neither does THQ's Red Faction). That said, Hickey remains somewhat optimistic, stating that Saints Row 2 "offers the Company their best owned IP opportunity for fiscal '09. The [first] game initially shipped 1.4 million units in its CY06 release for the Xbox 360, attaching to roughly 20% of the 6.9 million CY07 ending Xbox 360 Domestic/Europe installed base."

Overall, however, Hickey is quite skeptical about THQ's portfolio. "Management had considerable excitement for their fiscal '08 owned IP portfolio of both new IP and 'proven franchises,' many of which failed miserably in the market. We believe their fiscal '09 owned IP portfolio is fraught with title specific risk including: potential delays, lower then expected market demand, major competitive product offerings and lack of a realistic measure of market demand. We remain cautious on their owned IP opportunity for fiscal '09 and encourage clients to review their fiscal '08 owned IP pipeline, which provides at best, a remarkably shaky credibility foundation," he warned.