Yesterday, THQ poured out a vat of bitter medicine to gamers and shareholders alike. On the games front, THQ said it would be indefinitely garaging its underperforming Stuntman and Juiced driving franchises, canning the PlayStation 3 version of Frontlines: Fuel of War and the PlayStation 2 version of Destroy All Humans: Big Willy Unleashed, and closing its Concrete Games studio, which was at work on an unannounced game for fiscal year 2010. Investors received the unsavory news that the cancellations would yield a $27 million loss to THQ's bottom line, and that the publisher was shaving $40 million from its previously projected fourth-quarter revenues of $240 million.

　　THQ tried to spin what good news it had. The publisher revised its third-quarter revenue projection upward from $490 million to $509 million on the strength of WWE SmackDown vs. RAW 2008 and MX vs. ATV Untamed. But while the publisher tried to see a silver lining, the NASDAQ stock exchange saw things differently. THQ's price was in free fall, losing as much as 30 percent of its value. As of press time, the stock was down $6.61, or 26.33 percent.

　　While investors are speaking with their dollars, a handful of analysts are singing discordant tunes on THQ's current tribulations. Lazard Capital Markets analyst Colin Sebastian maintains his Buy rating for THQ's stock and views the publisher's move as a way to refocus on franchises that are in demand. "We note that THQ is taking more aggressive steps to pare its product portfolio of lower quality and underperforming franchises," he said, continuing, "and to focus on proven franchises and titles with better potential, including WWE SmackDown, Pixar (Wall-E), Saints Row, Red Faction, and the new UFC license."

　　In a note titled "We Think the Kitchen Sink Approach Positions THQ for Solid FY:09 Earnings," Wedbush Morgan Securities analyst Michael Pachter concurs with Sebastian, saying that the move trimmed away dead weight. "While this is a painful step," he said, "we think it positions THQ to grow earnings dramatically in fiscal year 2009, unburdened by these balance-sheet items." Pachter maintained his Strong Buy rating of THQ's stock, though he lowered the target price to $32 from $35.

　　However, at least one analyst is leery of THQ's hemorrhaging ship. Although not advising an outright sell, Pacific Crest Securities analyst Evan Wilson downgraded the publisher's stock to Sector Perform. "We are less optimistic about THQ's ability to capitalize on the industry's strength," says Wilson. "THQ has several potential catalysts in fiscal year 2008 (Wall-E, Saints Row 2, UFC)... However, we believe investors are better off waiting for a catalyst to materialize."