2011 and 2012 have not seen good things for THQ. Though Saints Row: The Third – however much of a disappointment it might have been (the reviewers’ words, not mine) – had proven to be a success, THQ is rapidly losing money ever since they shut down THQ Studios Australia, THQ Digital Phoenix and Blue Tongue to work on “high-quality owned IP.”
Last year, THQ had reported a $38 million net loss in Q1, and had shelved the Red Faction franchise after they had blamed Red Faction: Armageddon for its losses. Maybe they didn’t say that verbatim, but you can certainly take an educated guess why they’d stop making games in the franchise. Now they’re blaming uDraw for a $56 million loss in Q4. As if this wasn’t bad enough, Brian Farrell – CEO of THQ – reports that there are still over a million uDraw units in their inventory that could mean a loss of $100 million more in revenue. In light of this, THQ will not be pursuing ambitions with the uDraw any further.
It’s nice to know that THQ is moving away from the family market that almost every publisher and their grandma is obsessed with, but I’m hoping that they won’t regret it in the long run. Although Red Faction: Armageddon was easily one of the worst games I played last year, I’m thinking that THQ hasn’t really tried hard to get publicity for their games. Or maybe they’re trying too hard, because I see more commercials for their games than from any other publisher. Plus, the online passes might be hurting their revenue a little… Just saying. I wouldn’t hold my breath in the hopes that THQ would ditch such a thing though, considering that they probably think they need the $10 more than ever, and who can blame them?
If you thought things couldn’t get worse for THQ, they are now being threatened by the NASDAQ stock exchange with a delisting warning, because THQ has been trading stock for less than a dollar for over thirty days. It’s trading at $0.72 currently. THQ has 180 days to raise its stock prices above $0.99, but can appeal the delisting or request that its 180 days be extended. If THQ doesn’t resolve this issue by July 23, they may take a crippling blow.
Oh, and it gets better: THQ is laying off 240 employees, but this doesn’t include its five internal studios: Relic Entertainment; THQ Studios San Diego; Vigil Games; Volition, Inc.; and THQ Studio Montreal. The layoffs won’t be in effect yet, of course. However, as if to rub salt in the wound, THQ’s board of directors is taking a 50% salary cut! Holy s**t. This will effect everyone other than Farrell immediately, while Farrell will be taking the blow effective February 13, for a whole miserable year.
I’m hoping that THQ can pull themselves out of this mess, because they have published some unique and interesting IPs recently. I’m not a fan of their online passes, obviously, but I don’t want THQ to die because of that. I fear that if they go under, then other publishers won’t have a role model to look up to when considering new and original IPs.
So what do you all think? Will THQ be able to save themselves, or is it a company that has lost all hope?