THQ (NASDAQ:THQI) is set to report its earnings on Feb 4. The market waits to hear from Electronic Arts today, taking cues from which we can get a sense of how the retail market has been for THQ’s close competitor. After passing through a rough holiday season, most of the retailers have been faced with a relook at their restructuring processes. At the earlier announced restructuring program, the management aimed to lay off about 250 workers, or 17% of its studio staff. This would reduce its product development spending by about $100 million per year. As per the guidance by the management in the last quarter results, they expected sales of $400 million to $420 million in this season which included the most important holiday week.

Another move which was announced by the company last quarter was that it would restrict its core gamer titles from 3 to 4 a year to 1 or 2 a year. The rest of the industry however seems to buoyant of growth in the market for gaming as whole. Market research firm The NPD Group forecasts sales in the $22 billion to $23 billion range. In 2007, sales reached $18 million, the firm said. THQ certainly has missed some strategic insight what other players seem to be moving on.

However, we did see two new developments with regard to tie-ups. The management has entered into an agreement with Massive Inc., a wholly owned subsidiary of Microsoft in multiyear deal naming Massive as the exclusive, dynamic, in-game advertising partner for THQ’s upcoming game titles on the PC and the Xbox 360 video game and entertainment system."We have entered into a strategic agreement with Massive because it is a leader in the emerging industry of in-game advertising," said Scott Guthrie, executive vice president of publishing at THQ. "The Massive team has a strong track record of collaborating with game developers, sports leagues and advertisers to find a unique way to place brands and products that enhance the gameplay experience." In another move, the company has selected NVIDIA PhysX technology for use by its studios worldwide. NVIDIA PhysX technology is the world’s most pervasive physics solution for designing real-time, real-world effects into interactive entertainment games for a variety of platforms, including the PC, Nintendo Wii, Playstation 3, and Xbox 360. “The NVIDIA PhysX technology delivers astonishing physics effects and will help us develop the most competitive and innovative products in the marketplace,” said Roy Tessler, THQ’s senior vice president, production and worldwide studios. “With support for both the CPU and the GPU, PhysX technology allows us the creative freedom to design compelling environments and deliver truly immersive gaming experiences.”

It remains to be seen if the board intends to make some bold moves in order to acquire more market share or any effort towards savings its decreasing sales numbes.