THQ Exceeds Expectations for Fiscal 2004 Second Quarter and Updates Guidance to High End of Previous Range for 2004 Fiscal Year.

Business Editors/High-Tech Writers

CALABASAS HILLS, Calif.--(BUSINESS WIRE)--Oct. 20, 2003

Boosted by the solid performance of its new WWE(TM) games and Game Boy Advance titles, THQ Inc. (Nasdaq:THQI) announced today that its financial results for the second quarter of fiscal 2004 exceeded the company's previous guidance.

For the three months ended September 30, 2003, THQ's revenue increased 30% to $127 million from $97 million for the same period last year. Under U.S. GAAP, net income was $3.6 million, or $0.09 per diluted share, which included other income of $4 million (pre-tax), or $0.06 per diluted share, from an insurance settlement. Excluding the settlement, net income was $1.1 million, or $0.03 per diluted share. The company reported net income of $4.8 million, or $0.12 per diluted share for the same period a year earlier.

For the six months ended September 30, 2003, revenue increased 23% to $225 million from $183 million for the same period a year earlier. Under U.S. GAAP, net income was $32,000, or $0.00 per diluted share, which included other income of $4 million (pre-tax), or $0.06 per diluted share, from an insurance settlement. Excluding the settlement, the net loss was $2.5 million, or $0.07 per diluted share. For the corresponding period the prior-year, net income was $7.1 million, or $0.17 per diluted share, and included a non-cash charge of $2.6 million (net after tax).

Operations Review

"THQ is the number-three independent publisher year-to-date according to the August 2003 NPD TRST data. Our second-quarter performance demonstrates that THQ's portfolio strategy continues to yield positive results," said Brian Farrell, president and CEO, THQ. "New titles including `WWE(TM) Raw(TM) 2' for Xbox, `WWE(TM) Wrestlemania(R) XIX' for GameCube and `SplashDown(R): Rides Gone Wild(TM)' for PS2 sold well in the second quarter, as did `Disney/Pixar's Finding Nemo,' `Big Mutha Truckers' and a variety of titles in our leading Game Boy Advance portfolio."

Farrell added, "Heading into the holiday season, we are on schedule to have all of THQ's key titles for the December quarter on store shelves as planned before Thanksgiving. Our flagship WWE title, `SmackDown!(TM) Here Comes The Pain(TM),' has received high praise from the videogame press and we've seen intense consumer interest in the product. In addition, we look forward to the release of the next installment of our SpongeBob SquarePants franchise, `SpongeBob SquarePants: Battle for Bikini Bottom' for multiple platforms, as well as two new franchise opportunities `Tak and the Power of JuJu' and `Sphinx and the Cursed Mummy(TM).'"

THQ's holiday lineup also includes the continuing international roll-out of "Disney/Pixar's Finding Nemo" as the film debuts in various foreign territories; the North American release of "Warhammer(R) 40,000: Fire Warrior(TM)" for PlayStation 2 and PC; the popular Nickelodeon title "The Fairly Odd Parents: Breakin' Da Rules" on multiple platforms; and a robust Game Boy Advance lineup.

Fiscal 2004 Financial Guidance

THQ is providing initial guidance for the third quarter of fiscal 2004 and updating previous guidance for the fiscal year ending March 31, 2004:

-- For the third quarter of fiscal 2004, the company expects net

sales of approximately $255 million and net income of

approximately $0.77 per diluted share.

-- For the fiscal year ending March 31, 2004, THQ anticipates net

sales of approximately $570 million and net income of

approximately $0.85 per diluted share (excluding the $0.06

benefit from the insurance settlement), at the high end of the

company's previous range.

Second-Quarter Highlights

-- In September, THQ released the highly anticipated "WWE(TM)

Raw(TM) 2" for Xbox and "WWE(TM) Wrestlemania(R) XIX" for

GameCube.

-- "SplashDown(R): Rides Gone Wild(TM)" from THQ's Rainbow

Studios was a top-ten-selling title on PS2 based on dollar

sales for the month of August, according to NPD TRST data.

-- THQ was the #3 independent publisher year-to-date through

August 2003 according to NPD TRST data. THQ also maintained

its long-standing ranking as the #1 independent publisher of

handheld games.

-- The company signed a multi-platform publishing agreement with

Warner Bros. Consumer Products for its holiday 2004 theatrical

release "The Polar Express."

-- THQ secured a multi-product Game Boy Advance co-publishing

agreement with Sega Europe Ltd., which includes three titles

based on the popular "Sonic the Hedgehog" franchise.

-- THQ entered into a publishing agreement with Sony Computer

Entertainment America to publish Rainbow Studios' "ATV Offroad

Fury 2" in Europe.

-- The company signed a global Game Boy Advance distribution

agreement with Microsoft Corporation for top-selling Rare

titles, including "Banjo-Kazooie: Grunty's Revenge."

-- During the quarter, THQ repurchased just over 500,000 shares

of its stock for $8 million. The company has repurchased a

total of 2.7 million shares for $41 million since 2002 and has

approximately $9 million available under the current

authorized repurchase plan.

Investor Conference Call:

THQ management will host an investor conference call today, October 20, 2003, at 1:15 p.m. PDT (4:15 p.m. EDT) to review the company's financial results and operations for the quarter ended September 30, 2003 and discuss its future outlook. The call may be accessed by dialing 617-786-2961 or by visiting the investor relations home page on THQ's Web site at www.thq.com. The audio webcast will be available through November 3, 2003.

THQ Inc. is a leading, worldwide developer and publisher of interactive entertainment software for a variety of hardware platforms including those manufactured by Sony Computer Entertainment America Inc., Nintendo and Microsoft as well as PC CD-ROM and wireless devices. The THQ web site is located at www.thq.com. The THQ Wireless site is located at www.thqwireless.com. THQ and Rainbow Studios 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 net sales, net income and earnings per share for the quarter ending December 31, 2003 and the fiscal year ending March 31, 2004. These statements are based on current expectations, estimates and projections about THQ's business based, in part, on assumptions made by its management. These statements are not guarantees of THQ's future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including, but not limited to, those described above and the following: changes in demand for THQ's products, including the original content and licensed content games referenced herein, product mix, the timing of product development, customer orders and deliveries and the impact of competitive products. In addition, such statements could be affected by growth rates and market conditions relating to the interactive software industry and general domestic and international economic conditions. Specific information concerning these and other such factors is contained in the company's transition report on Form 10-KT for the period ended March 31, 2003. A copy of this filing may be obtained by contacting THQ or the SEC. The forward-looking statements contained herein speak only as of the date on which they are made, and THQ does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.

                               THQ Inc.
               Second Quarter 2004 Earnings Announcement
                  Condensed Statements of Operations
                 (In thousands, except per share data)


Table 1                      Three Months Ended    Six Months Ended
                               September 30,         September 30,
                               2003      2002       2003       2002
                            ---------- --------- ---------- ----------
Net sales                   $126,517   $97,335   $224,612   $183,096

Costs and expenses:
  Cost of sales               44,988    37,006     83,241     69,502
  License amortization and
   royalties                  15,551     8,015     24,803     15,114
  Software development
   amortization               23,026    12,982     42,270     24,570
  Product development          9,393     8,876     18,160     17,044
  Selling and marketing       20,495    13,838     39,623     25,259
  Payment to venture partner   2,095     1,044      2,560      2,544
  General and administrative   9,681     9,391     19,045     16,585
                            ---------  --------  ---------  ---------
Total costs and expenses     125,229    91,152    229,702    170,618
                            ---------  --------  ---------  ---------
Income (loss) from
 operations                    1,288     6,183     (5,090)    12,478
Interest income, net             409     1,257      1,141      2,836
Other income (expenses)        4,004        --      4,000     (3,006)
                            ---------  --------  ---------  ---------
Income before income taxes     5,701     7,440         51     12,308
Income taxes                   2,109     2,636         19      5,214
                            ---------  --------  ---------  ---------
Net income                  $  3,592   $ 4,804   $     32   $  7,094
                            =========  ========  =========  =========
Net income per share --
 diluted                    $   0.09   $  0.12   $   0.00   $   0.17
                            =========  ========  =========  =========
Shares used in per share
 calculation -- diluted       39,159    41,464     39,060     41,751
                            =========  ========  =========  =========

The above table reflects our Condensed Statement of Operations in
accordance with U.S. Generally Accepted Accounting Principles.

Certain reclassifications have been made to the prior year's
consolidated financial statements to conform to current period
consolidated financial statements.
-0-


      Reconciliation of Net Income to Non-GAAP Net Income (Loss)
                 (In thousands, except per share data)


Table 2                       Three Months Ended    Six Months Ended
                                September 30,        September 30,
                                2003      2002       2003      2002
                             ---------- --------- ---------- ---------
Net income                   $  3,592   $ 4,804   $     32   $ 7,094

Settlement of dispute with
 directors' and officers'
 insurance carrier             (4,000)       --     (4,000)       --
Discontinuation of Network
 Interactive Sports
 online joint venture              --        --         --     3,006
Income taxes                    1,480        --      1,480      (376)
                             ---------  --------  ---------  --------
Non-GAAP net income (loss)   $  1,072   $ 4,804   $ (2,488)  $ 9,724
                             =========  ========  =========  ========
Non-GAAP net income (loss)
 per share -- diluted        $   0.03   $  0.12   $  (0.07)  $  0.23
                             =========  ========  =========  ========
Shares used in per share
 calculation -- diluted        39,159    41,464     38,258    41,751
                             =========  ========  =========  ========

The reconciliation of U.S. GAAP net income to Non-GAAP net income
(loss) excluding the settlement with the directors' and officers'
insurance carrier and the non-cash charge for the discontinuation of
the NIS on-line joint venture in 2003 and 2002, respectively, are
detailed in the above financial tables. We have excluded the
settlement and non-cash charge in Non-GAAP net income (loss) because
they are considered "non-operational" in nature. Non-GAAP net income
(loss) excluding the settlement and non-cash charge is not recognized
as a measure for financial statement presentation under U.S. GAAP.
However, management believes that this information is useful for
investors in evaluating our operational performance and for
facilitating meaningful comparison to prior periods.
-0-


                               THQ Inc.
               Second Quarter 2004 Earnings Announcement

                               Table 3               Balance Sheets
                                                     (In thousands)
                                                  Sept. 30,  March 31,
                                                    2003       2003
                                                  ---------  ---------

ASSETS
Cash, cash equivalents and short-term
 investments                                      $154,388   $216,011
Accounts receivable -- net                          86,866     35,976
Inventory                                           22,442     24,339
Licenses                                            19,026     15,330
Software development                                56,342     54,824
Income taxes receivable                              3,849      1,116
Prepaid expenses and other current assets           24,262     11,316
                                                  ---------  ---------
  Total current assets                             367,175    358,912
Property and equipment, net                         17,087     16,408
Licenses -- net of current portion                  16,579     20,053
Software development -- net of current portion       1,528      2,640
Deferred income taxes                                8,126      8,346
Goodwill -- net                                     60,909     58,609
Other long term assets -- net                        8,909      7,981
                                                  ---------  ---------
  Total assets                                    $480,313   $472,949
                                                  =========  =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable                                  $ 24,619   $ 21,001
Accrued expenses                                    22,738     20,766
Accrued royalties                                   22,336     22,893
Deferred income taxes                                7,133      7,353
                                                  ---------  ---------
  Total current liabilities                         76,826     72,013
Accrued royalties -- net of current portion          4,800      4,523

Common stock                                           382        380
Additional paid-in capital                         304,791    305,328
Accumulated other comprehensive income (loss)        4,273      1,496
Retained earnings                                   89,241     89,209
                                                  ---------  ---------
  Total stockholders' equity                       398,687    396,413
                                                  ---------  ---------
  Total liabilities and stockholders' equity      $480,313   $472,949
                                                  =========  =========
-0-


                               THQ Inc.
                         Supplementary Tables

                                     Three Months       Six Months
                                         Ended             Ended
                                     September 30,     September 30,
                                     2003     2002     2003     2002
                                   -------  -------  -------  -------
Platform Revenue Mix
PlayStation 2                        26.4 %   23.4 %   27.7 %   25.3 %
PlayStation                           2.6     10.2      3.1      9.4
Game Boy Advance                     29.0     24.8     25.9     25.8
Game Boy Color                        0.1      7.5      0.7      4.7
Game Cube                            10.4     17.0      9.0     17.8
Xbox                                 16.9      4.9     18.2      6.9
PC                                   12.8     12.7     14.0     10.3
Wireless                              1.4      0.7      1.3      0.6
Other                                 0.4     (1.2)     0.1     (0.8)
                                   -------  -------  -------  -------
                                    100.0 %  100.0 %  100.0 %  100.0 %
                                   =======  =======  =======  =======

Geographic Revenue Mix
Domestic                             76.8 %   76.4 %   74.1 %   78.0 %
Foreign                              23.2     23.6     25.9     22.0
                                   -------  -------  -------  -------
                                    100.0 %  100.0 %  100.0 %  100.0 %
                                   =======  =======  =======  =======