- Company Posts 11th Consecutive Year of Revenue Growth -

- Ten Titles Surpass One Million Units Shipped in FY 2006 -

- Management Reiterates Guidance for FY 2007 -

AGOURA HILLS, Calif., May 5 /PRNewswire-FirstCall/ -- THQ Inc. (Nasdaq: THQI) today announced results for the fourth quarter and fiscal year ended March 31, 2006 and reaffirmed its guidance for fiscal 2007.

For the twelve months ended March 31, 2006, THQ reported its 11th consecutive year of revenue growth as net sales increased to a record $806.6 million from $756.7 million for fiscal 2005. Net income for fiscal 2006 was $34.3 million, or $0.52 per diluted share. This compares to prior- year net income of $62.8 million, or $1.04 per diluted share, which included a $0.13 per diluted share benefit from research and development tax credits claimed for prior years. Fiscal 2006 results reflect increased investment in product development in advance of the new generation of video game consoles.

THQ reported fiscal 2006 fourth quarter net sales of $148.1 million and a net loss of $7.9 million, or $0.12 per share. Top selling titles in the fourth quarter were The Outfit(TM) on the Xbox 360(TM) video game and entertainment system from Microsoft and continued strong sales of holiday titles such as WWE(R) SmackDown(R) vs. RAW(R) 2006. As previously announced, the net loss includes $0.08 per share of software development expense related to the cessation of internal product development for wrestling games and $0.06 per share of higher-than-expected price protection and software development expense for Full Spectrum Warrior(TM): Ten Hammers. In the same period a year ago, the company reported net sales of $171.9 million and net income of $10.1 million, or $0.16 per diluted share.

"THQ posted record net sales in fiscal 2006, fueled by our success with mass-market games based on our three core brands, Disney/Pixar, World Wrestling Entertainment and Nickelodeon, and the establishment of two new original franchises targeted to avid gamers, Juiced and Destroy All Humans!," said Brian Farrell, president and CEO, THQ.

Farrell added, "We continue to execute against our plans to manage through the platform transition. We expect our investments in next-generation product development to begin yielding strong results starting in fiscal 2007 with products such as Saints Row and WWE SmackDown vs. RAW 2007. In fiscal 2008, we plan to release an increasing number of next-generation titles in order to capitalize on the growing hardware installed base, including products such as Frontlines: Fuel of War and others yet to be announced. With strong licenses secured for the long term, 1,200 people in our internal studio system, a growing direct international business and more than $370 million in cash and short-term investments, we are well positioned to expand our leadership in the video game industry."

Fiscal 2007 Guidance

THQ reaffirmed previous guidance for the full fiscal year ending March 31, 2007 and provided initial guidance for the fiscal first quarter ending June 30, 2006:

* Consistent with previous guidance, for the fiscal year ending March 31, 2007, THQ expects net sales in the range of $900 million to $950 million and net income in the range of $0.90 to $1.00 per diluted share. This excludes forecasted equity-based compensation expense of $0.16 per diluted share.

* For the first quarter of fiscal 2007, the company expects net sales of approximately $125 million and a net loss of about $0.21 per share, excluding forecasted equity-based compensation expense of $0.04 per share.

Fiscal 2006 Accomplishments:

* THQ reported its 11th consecutive year of net sales growth

* THQ gained market share in all of its major markets -- North America, Europe and Australia

* THQ established two new owned and original franchises, Juiced(TM) and Destroy All Humans!(TM)

* THQ published 10 titles that shipped more than one million units, including WWE SmackDown vs. RAW 2006 at three million units

* THQ grew international net revenue to 39% of net sales as it expanded its direct sales operations in Europe and Asia Pacific

* THQ Wireless net revenues grew to $36 million from $25 million a year ago

* THQ added four new internal development studios, expanding its studio system to include 14 internal studios across North America, Australia and Europe

* THQ grew its internal product development personnel 33% to approximately 1,200 from 900 a year ago, supporting its strategy to develop more franchises internally and to establish a leadership position early in the next console cycle

* THQ generated operating cash flow of $43 million while continuing to invest in new studios and next-generation game development

Investor Conference Call

THQ will host a conference call to discuss fiscal fourth quarter results today at 11:00 a.m. Eastern/8:00 a.m. Pacific. Please dial 800.901.5218 or 617.786.4511, access code 93532728 to listen to the call or visit the THQ Inc. Investor Relations Home page at www.thq.com. The online archive of the broadcast will be available approximately two hours after the live call ends. In addition, a telephonic replay of the conference call will be provided approximately two hours after the live call ends through May 8, 2006 by dialing 888.286.8010 or 617.801.6888, access code 97231204.

THQ Inc. (Nasdaq: THQI) is a leading worldwide developer and publisher of interactive entertainment software. The company develops its products for all popular game systems, personal computers and wireless devices. Headquartered in Los Angeles County, California, THQ sells product through its global network of offices located in North America, Europe and Asia Pacific. More information about THQ and its products may be found at www.thq.com and www.thqwireless.com. THQ, THQ Wireless, Destroy All Humans!, Frontlines: Fuel of War, Juiced, Saints Row, The Outfit and their respective logos are trademarks and/or registered trademarks of THQ Inc.

This press release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, the company's expectations for revenue and earnings per share for the quarter ending June 30, 2006 and the fiscal year ending March 31, 2007 and for the company's product releases and financial performance in future periods. These forward-looking statements are based on current expectations, estimates and projections about the business of THQ Inc. and its subsidiaries (collectively referred to as "THQ") and are based upon management's beliefs and certain assumptions made by management. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including, but not limited to, economic, competitive and technological factors affecting the operations, markets, products, services and pricing of THQ. Unless otherwise required by law, THQ disclaims any obligation to update its view on any such risks or uncertainties or to revise or publicly release the results of any revision to these forward-looking statements. Readers should carefully review the risk factors and the information that could materially affect THQ's financial results, described in other documents that THQ files from time to time with the Securities and Exchange Commission, including its Quarterly Reports on Form 10-Q and its Annual Report on Form 10-K for the fiscal period ended March 31, 2005, and particularly the discussion of risk factors that may affect results of operations set forth therein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.

CONTACT:

Julie MacMedan
THQ/Investor Relations
818/871-5095

Liz Pieri
THQ/Media Relations
818/871-5061

                            THQ Inc. and Subsidiaries
            Unaudited Condensed Consolidated Statements of Operations
                      (In thousands, except per share data)

                                 Three Months Ended    Twelve Months Ended
                                      March 31,             March 31,
                                   2006       2005       2006       2005
    Net sales                    $148,053   $171,927   $806,560   $756,731

    Costs and expenses:
      Cost of sales                56,943     59,139    282,253    250,055
      License amortization and
       royalties                   14,150     15,414     80,508     85,926
      Software development
       amortization                35,447     15,131    116,371     93,622
      Product development          19,894     23,422     84,242     72,959
      Selling and marketing        21,304     29,386    129,245    115,646
      Payment to venture partner    1,446        688     12,572      9,774
      General and administrative   17,330     17,024     67,615     54,831
      Total costs and expenses    166,514    160,204    772,806    682,813
    Income from operations        (18,461)    11,723     33,754     73,918
      Interest income               2,715      1,547      8,478      4,337
    Income before income taxes
     and minority interest        (15,746)    13,270     42,232     78,255
      Income taxes                 (7,754)     3,068      7,900     15,204
    Income before minority
     interest                      (7,992)    10,202     34,332     63,051
      Minority interest                53        (92)       (63)      (261)
    Net income                    $(7,939)   $10,110    $34,269    $62,790
    Net income per share
     - basic                       $(0.12)     $0.17      $0.55      $1.07
    Net income per share
     - diluted                     $(0.12)     $0.16      $0.52      $1.04
    Shares used in per share
     calculation - basic           63,686     59,636     62,615     58,545
    Shares used in per share
     calculation - diluted         63,686     62,502     65,575     60,365

    Share and earnings per share data have been restated to reflect our
    three-for-two stock split for shareholders of record as of August 19,
    2005, paid September 1, 2005.



                            THQ Inc. and Subsidiaries
                 Unaudited Condensed Consolidated Balance Sheets
                                  (In thousands)

                                                      March 31,     March 31,
                                                        2006          2005

    ASSETS
      Cash, cash equivalents and short-term
       investments                                    $371,637      $331,173
      Accounts receivable, net                          78,876        73,700
      Inventory                                         28,620        23,802
      Licenses                                          20,849        12,464
      Software development                              91,843        57,107
      Income taxes receivable                            7,592         9,783
      Prepaid expenses and other current assets         12,420        14,530
        Total current assets                           611,837       522,559
      Property and equipment, net                       37,485        26,822
      Licenses, net of current portion                  60,623        75,523
      Software development, net of current portion      17,236         8,144
      Income taxes receivable, net of current portion    9,513         9,513
      Goodwill                                          90,872        83,440
      Other long-term assets, net                       23,048        21,392
        TOTAL ASSETS                                  $850,614      $747,393

    LIABILITIES, MINORITY INTEREST AND
     STOCKHOLDERS' EQUITY
      Accounts payable                                 $34,871       $36,499
      Accrued and other current liabilities            109,421        77,532
      Deferred income taxes                              3,578         6,841
        Total current liabilities                      147,870       120,872
      Other long-term liabilities                       60,323        72,059
      Deferred income taxes, net of current portion     10,272         4,466
      Minority interest                                  1,340         1,238
      Common stock                                         639           607
      Additional paid-in capital                       397,696       347,462
      Accumulated other comprehensive income            10,367        12,851
      Retained earnings                                222,107       187,838
        Total stockholders' equity                     630,809       548,758
        TOTAL LIABILITIES, MINORITY INTEREST
         AND STOCKHOLDERS' EQUITY                     $850,614      $747,393



                            THQ Inc. and Subsidiaries
                   Unaudited Supplemental Financial Information

                                    Three Months Ended   Twelve Months Ended
                                         March 31,             March 31,
                                      2006       2005       2006      2005
    Platform Revenue Mix
    Consoles
       Sony PlayStation 2             24.6%      37.8%      36.7%     36.5%
       Microsoft Xbox                  5.4       14.2       10.9      10.7
       Microsoft Xbox 360              9.8        0.0        1.8       0.0
       Nintendo Game Cube              3.7        4.6        7.3       9.7
                                      43.5       56.6       56.7      56.9

    Handheld
       Nintendo Game Boy Advance      20.2       28.5       21.3      27.0
       Nintendo Dual Screen            9.8        0.5        4.1       0.4
       Sony PlayStation Portable      10.7        0.0        3.6       0.0
       Wireless                        5.5        4.6        4.5       3.3
                                      46.2       33.6       33.5      30.7

    PC                                11.4        9.8        9.6      11.4
    Other                             (1.1)       0.0        0.2       1.0
                                     100.0%     100.0%     100.0%    100.0%

    Geographic Revenue Mix
    Domestic                          59.4%      59.4%      60.7%     62.2%
    Foreign                           40.6       40.6       39.3      37.8
                                     100.0%     100.0%     100.0%    100.0%

SOURCE THQ Inc.
05/05/2006
CONTACT: Julie MacMedan, THQ/Investor Relations, +1-818-871-5095, or Liz
Pieri, THQ/Media Relations, +1-818-871-5061
Web site: http://www.thqwireless.com
Web site: http://www.thq.com
(THQI)