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Sony, MS and Nintendo need to change business model - THQ

CEO Farrell calls for open systems that allow micro-transactions

THQ has called on Microsoft, Sony and Nintendo to change their home console business strategy - and allow for microtransactions controlled by third-parties.

In comments no doubt mostly directed at Microsoft - whose Xbox 360 remains closed to in -game commerce directly managed by other companies - Farrell warned that the 'big three' needed to evolve if they are to remain dominant.

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THQ is trialling an experimental new packed goods pricing model with MX vs ATV: Alive - offering the title to customers at a low cost via retail, with the opportunity to buy more content online.

Farrell told the Goldman Sachs Technology and Internet Conference yesterday that to maximise the potential of this model, the dominant platform holders would have to adjust their strategy - echoing similar calls from the likes of Valve in the past.

When asked how quickly THQ will be able to "ramp up" the micro-transaction model seen with MX vs ATV, Farrell said:

"What we really need, and we've been talking to them about it, is for Microsoft, Sony and Nintendo - if they really want to stay at the cutting edge of the games industry - they need to adjust their business models to allow for these new consumer experiences. Consumers are going to demand it, in our view.

"Again, we're platform agnostic: if someone else comes with some kind of a Cloud system or one of the other platforms takes off competitively [in a way] that allows consumers to consume the way they want?

"That's going to be the winner at the end of the day, and that's where we're going to migrate our content. We'll make great franchises. If new platforms emerge, or the current winners adjust their business models - which we're pushing for really hard - we have to keep our flexibility."

He added: "Our main focus is to deliver these big entertainment franchises, and then leverage them across the screens to do one of two things: obviously the primary objective is making money, but the second one is that we can use Facebook, iPhone, iPad, some of these other devices, as ways to keep our customer engaged with our product and also to market to that consumer.

For example, we have several Facebook games up now leveraging one of our bigger brands; they do two things: they generate some revenue and cash flow although for a company of our size it's not that meaningful yet, but if someone enjoys the UFC or the Saints Row experience, they can stay engaged with it.

"What we're thinking about those new markets is if we create great entertainment - and we've been doing this for 20 years - we need to be platform agnostic and figure out where's the business opportunity for a particular consumer on a particular platform."

Farrell has previously suggested that the $59.99 US asking price for games is "keeping people out", and that THQ plans to explore cheaper price points in a move that he says is "the way games are going to go".

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