THQ made a strong move into the casual gaming sector today with the acquisition of the Elephant Entertainment casual and online games business. Along with this acquisition comes news of an agreement with Oberon Media, where THQ will be offering Oberon’s owned and licensed content to major gaming platforms.

With these moves, THQ has stabled a large chunk of talent specifically focused on casual game production and development. The $2.25 billion casual game market of 2007, which is expected to grow another 20% in 2008, was likely a driving force behind the actions of THQ in their agreement and acquisition.

THQ did not specfically mention whether or not any games from this deal would be coming to a Nintendo platform.

THQ Expands Casual Game Portfolio with Elephant Entertainment(TM) Purchase and Exclusive Retail Publishing Agreement with Oberon Media

AGOURA HILLS, Calif. - (Business Wire) THQ Inc. (NASDAQ:THQI) today announced the acquisition of the Elephant Entertainment™ casual and online games business. In conjunction with this acquisition, THQ also announced an exclusive, worldwide retail publishing agreement with Oberon Media, the world’s leading cross-platform casual games company.

THQ plans to launch more than 20 new casual and online games on multiple platforms in 2008 under the Elephant Entertainment brand name. Elephant Entertainment President and COO Wim Stocks, an 18-year veteran of the interactive entertainment business, will continue to lead Elephant Entertainment and will report to Doug Clemmer, president of THQ’s ValuSoft casual games division.

Through the agreement with Oberon Media, THQ plans to bring Oberon’s owned and licensed content, including the successful Dream Day online franchise, to major gaming platforms. In addition, Oberon is scheduled to release best selling author James Patterson’s Women’s Murder Club: Death in Scarlet online this May, which Elephant plans to distribute at retail this fall. THQ and Elephant Entertainment will also provide retail support for the custom online casual game communities and download platforms created by Oberon Media for select retailers.

“The addition of Elephant Entertainment and our exclusive retail publishing deal with Oberon significantly expands the depth and breadth of our casual and online game offering,” said Doug Clemmer, president of ValuSoft, THQ’s casual games division. “These deals will allow us to expand our presence in this rapidly growing segment and deliver unique value to our retail partners through Oberon’s turn-key solution to deliver online games.”

“We are extremely excited to become a part of THQ,” said Wim Stocks, president and COO, Elephant Entertainment. “THQ is a leader in family and casual interactive entertainment and we are excited to help further grow THQ’s portfolio and pipeline in the casual and online game market.”

“The casual games segment is booming and this deal with THQ will allow us to strengthen our industry positioning and bring more games to market,” said Don Ryan, senior vice president of publishing, Oberon Media. “Both Elephant and THQ are led by very talented teams and I look forward to working more closely with them as we move forward together.”

In 2007, the worldwide casual game market totaled $2.25 billion and is expected to grow 20% year-over-year in established markets (source: Pearl Research, Screen Digest CGA.) Terms of the transaction were not disclosed.