I know, right? Another post dedicated to THQ’s financial issues.
Somehow this story keeps rumbling on, as THQ have recently announced a new president and this new president has some interesting things to say.
Click on to get a better idea of what’s gone on previously and what could happen in the future.
THQ have been losing money and cutting jobs for at least the past two years. Most quarterly reports consist of confirming redundancies, talking about how big their next games will be and then finishing up with stating the millions lost in the last 3 months. Not very pretty reading which soon took its toll on the companies stock price, with Recent reports doing little to stop the dip.
These financial woes were further compounded through the years as critically successful games didn’t turn into commercially successful ones, bad ideas turned into terrible ones and the guaranteed success of licensed games became less of a guarantee. Meaning THQ have had to put their Red Faction franchise ‘on hold’ after it didn’t meet the company’s expectations in terms of sales.
THQ have also had to re-address their dependence on kid’s licenses, also claiming that these titles weren’t making the money that they needed to for them to be viable.
Speaking of licenses, there was the recent sell-off of their UFC license to EA. This again occurred thanks to the fact that the games just weren’t selling enough to be worth their time. Reports stated that UFC3 needed to shift 2 million units just to break even. When large numbers like that are required just to re-coup your initial investment, then it’s pretty clear that something’s fundamentally wrong with the THQ way of doing business.
There’s also the unprecedented failure known as UDraw. What started off as an initial success, with the UDraw selling 1.7 million units on the Wii, soon turned into a disaster. For some reason, THQ thought this tablet wasn’t just a gimmick and, instead of taking their money and running, they pushed on further with the UDraw brand, setting their sights on creating a PS3 and 360 version. There were reports of several UDraw games being in development, though these titles never saw the light of day as pretty soon sales figures started to confirm what most anyone would have guessed. The UDraw wasn’t selling on these consoles and of the supposed “million or so” units sold, most were at a discount price of $50 instead of the $80 launch price. This means that there’s over 1.4 million UDraw tablets sitting in a warehouse somewhere. Don’t be surprised if they end up in the Nevada desert. E.T. joke right there!
This couldn’t go on for much longer. Something had to change.
Step-in the newly announced President of THQ. Jason Rubin, who co-founded the highly successful studio Naughty Dog, was announced to be taking over from Danny Bilson. This has led people to be somewhat optimistic as Naughty Dog has managed to develop several high-profile and hugely succesful franchises including Crash Bandicoot, Uncharted, Jak & Daxter and the hotly anticipated The Last of Us.
The first thing that needs to be addressed is THQ’s truly appalling share price. Currently trading at under a dollar, they’re in danger of being de-listed. Some have suggested that a ‘reverse stock split’ could be used to bump up the value of the shares. Whilst this could work in the short-term, more needs to be done to appease the investors. Could their new President help?
With Jason Rubin at the helm of THQ now, a statement of intent was needed. Just what was the plan from Mr Rubin?
“[we will concentrate on] a small slate of titles and making sure we have the money to back them so the developers don’t have to rush,”
“I really don’t care how we got here. This is where we are and I think the company is in a strong position.”
Strong words that indicate THQ will be focusing on releasing a few AAA titles a year, instead of having a steady stream of mediocre releases.
This makes sense to me. Looking at Naughty Dog’s style of production, you’ll see that there’s a reliance and a talent for releasing high-quality games on a yearly basis. Though this is surely every developer’s dream, is it not?
With THQ’s main aim now turning to AAA titles, I wonder how sensible that could be. Whilst it’s all good to have a few well-funded titles in development at a time, it means that any mistakes are much more costly. Another failure along the lines of UDraw could be much more damaging with this new style of funding development in place.
Fingers crossed for THQ. They’ve made some great games and they seem keen on doing things ‘the right way’, ditching their previous methods of lazy license cash-ins. For the sake of the people playing the games and importantly, for the people making the games, I hope this is the start of THQ’s journey to recovery.