THQ slashes third-quarter revenue forecast by 25%

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There’s more bad news for THQ Inc.

The Agoura Hills video game publisher on Wednesday said revenue for the critical holiday quarter is likely to come in 25% below what it had initially forecast earlier this year.

THQ Chief Executive Brian Farrell attributed the shortfall to weak sales of uDraw, a game that lets players draw pictures on a tablet device that’s connected wirelessly to consoles.

The tablet, which was originally priced between $70 and $80, can now be purchased for roughly $50 at retailers such as GameStop. Games for the tablet, which are sold separately, now cost about $30, down from $40.

‘Despite uDraw’s strong success on the Wii in fiscal 2011 and market research indicating strong demand for uDraw on Xbox 360 and PlayStation 3, initial sales of our uDraw tablet and software on these high-definition platforms have been weaker than expected,’ Farrell said in a statement.

As a result, THQ said it now expects third-quarter revenue to be between $382.5 million and $412.5 million, missing its earlier target of $510 million to $550 million by 25%.

THQ’s shares shed 18 cents, down 11%, to $1.46 in after-hours trading after the announcement.

Earlier this year, the game publisher stumbled with disappointing sales of Red Faction: Armageddon, forcing the company to cancel the franchise altogether.

On Thursday, investors will see how well THQ’s two other properties -- Saints Row: The Third and WWE12 -- have held up when market research firm NPD Inc. reports November video game sales.

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-- Alex Pham