Posted on May 1, 2014 AT 01:55pm
The bankruptcy of THQ and the forced shift of the WWE videogame license to Take-Two Interactive was one of two key factors that led to Q1 2014 losses for WWE, BusinessWire.com reports.
The WWE saw an $11 million decline in their year-over-year earnings between Q1 2013, when they had a three-million dollar profit, and Q1 2014, when they reported an eight-million dollar loss. Licensing revenue specifically was hit particularly hard, with a $10 million year-over-year drop-off.
According to WWE’s investor release, a large chunk of the licensing revenue change was “primarily driven by the transition to a new videogame partner, Take-Two Interactive, and contractual changes in the company’s licensing agreement.” The report also states that sales numbers of the WWE videogames were virtually the same as the prior year, pointing to the licensing shift itself as the issue.
Part of the discrepancy also comes from the fact that THQ had to cut WWE a two-million dollar check for terminating their agreement early, even if it was for bankruptcy.
It should be noted that besides the new licensing arrangement, the launching of WWE’s own premium app, the WWE Network—which allows fans to stream all WWE pay-per-views, download exclusive content, and watch WWE archives for a monthly fee—is listed as the other major factor for the company’s reported losses.
Despite the loss, the WWE actually performed better than projected, in large part due to higher-than-expected profits from their film and live event divisions.
WWE is about to enter the second year of a five-year licensing deal with Take-Two. Considering the yearly status of the franchise, we should expect a WWE 2K15 sometime this fall.
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