THX PLANNING AUDIO FOR VIDEOGAMING INITIATIVE
THX Ltd., newly spun off as independent company from Lucasfilm, plans announcement possibly by Aug. on new certification initiative in audio for videogaming, Mike Hewitt, acting gen. mgr., said in interview. He declined to offer specifics, including possible hardware or software partners, except to say program ultimately would be “platform-agnostic.”
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Aside from working with Dell Computer on disc drive enhancements for playback of DVDs and CD-ROMs, including game software, new initiative would be THX’s first full-blown foray into consumer videogaming, Hewitt said. He said initiative typified areas independent THX Ltd. would be freer to pursue now that it was out from under direct Lucasfilm umbrella. Hewitt said Lucasfilm parentage hampered THX operations from pursuing ventures outside core AV expertise because “conflict-of-interest” concerns made it difficult to woo prospective software partners. For example, Hewitt said, Lucasfilm’s ownership of LucasArts Entertainment caused other game publishers to view any videogaming overtures “with suspicion.”
Hewitt said privately held THX Ltd. wouldn’t identify its private or corporate investors, except to acknowledge they included Lucasfilm and Creative Technology, and repeated earlier statements that no single investor had majority stake. Responding to our question, He said investors included investment banking firms but no other CE companies besides Creative. Hewitt said despite scattered catcalls, industry reaction to spinoff had been “overwhelmingly positive.” He said he never would rule out isolated licensee defections, adding that if any licensee felt alienated by THX spinoff, “I'd rather be told of that sooner rather than later.” He said when Lucasfilm was studying options for THX divestiture, it shopped THX Ltd. around for potential buyers. He said he believed some of criticism about spinoff had been “sour grapes” griping from companies that lost out on acquisition opportunity.
As for specific complaint by some THX home theater licensees that THX royalties now would flow into coffers of Creative’s Cambridge Soundworks brand against which they competed, Hewitt said any money that came into THX Ltd. would remain in company. He also said there had been no negative noise about brands competitive to Cambridge that thrived on sales through Hifi.com e-commerce site that Creative also owned. Moreover, he said, without disclosing specifics, that Creative’s investment in THX Ltd. was “almost immaterial for a company of its size.” Responding to another complaint that spinoff removed THX’s direct link from those making movies, Hewitt said Lucasfilm recently released Star Wars: Episode II -- Attack of the Clones theatrically, “and they couldn’t have done it without us.” He suggested those who suffered biggest emotional loss from spinoff were employees who used to delight in telling friends they worked for Lucasfilm.
Hewitt wouldn’t rule out option of taking THX Ltd. public, but not for at least 24 months. He said benefits that would accrue from filing IPO, especially raising of funds to support corporate operations, weren’t company’s highest priorities right now because THX Ltd. could turn to current roster of investors for additional funding if needed.