[ALL] THQ kaput?

[IamMedellin]

THQ confirms layoffs of 240 employees [updated]

THQ has confirmed planned layoffs of "up to 240 selling, general and administrative personnel worldwide," with plans to finalize the proceedings by September 30, 2012. The company promises that the "majority" of said layoffs will occur before March 31, 2012 and many of the employees affected have already been notified.

The 240 number is a marked increase from numbers we heard earlier today, making the situation at THQ look all the more dire. Today's announcement reflects specific numbers for layoffs that THQ first confirmed last week.

Though the company makes note of the recently announced restructuring away from kids and licensed titles, nothing is mentioned of the rumored cancelation of the Warhammer 40K MMO. We expect to hear even more when THQ announces its fiscal third quarter results tomorrow afternoon.

Update: THQ tells Joystiq that, "These are the cuts we described in our statement last week. No studios are a part of this. It's administration and publishing offices worldwide." The company declined to comment on whether these layoffs will affect any currently announced projects.

Update 2: This post originally stated that THQ would be laying off the 240 employees across nine months, which is inaccurate. Due to varying employment guidelines around the world and internal financial considerations, the restructuring will be completed by September 30, 2012, but most of the affected employees have already been notified.

THQ CEO Farrell takes 50% pay cut, board of directors also takes cuts

THQ is definitely experiencing some troubles related to its uDraw flop and subsequent layoffs, as evidenced by a new document filed with the Securities and Exchange Commission.
President and CEO Brian Farrell will take a pay cut for the year starting February 15, which reduces his salary from $718,500 to $359,250. His salary will go back up the next year.

His golden parachute has also been tailored a bit more closely, as the payment he'd receive upon departure from the company (either termination "without cause" or resignation with "good reason") has been cut from three times his highest-ever bonus to just his highest-ever bonus. This is, of course, a small sacrifice compared to the THQ employees whose salaries went from "some" to "none."

The board of directors is also seeing some cuts: all the other directors have "elected" to receive 50% less cash compensation for a year effective today.

http://www.joystiq.com/2012/02/01/thq-ceo-farrell-takes-50-pay-cut-board-of-directors-also-takes/

 

[1ke]

What was the last good game they made? And do they still own Yukes? I remember Yukes killing shit for them cuz of the WWE games. Not so much these days huh?

Also, THQ had a mini monoploy on the moto-cross genre. Bad genre to rape in huh...lol

 

[BrntO4Life]

What was the last good game they made? And do they still own Yukes? I remember Yukes killing shit for them cuz of the WWE games. Not so much these days huh?

Also, THQ had a mini monoploy on the moto-cross genre. Bad genre to rape in huh...lol

Saints Row 3 came out three months ago...

 

[Golden Taters]

Saints Row 3 came out three months ago...

That was the only Saints Row I didn't like, to be honest.

 

[Swarley]

That was the only Saints Row I didn't like, to be honest.

:michaelscott:

 

[1ke]

Consider me out of the loop then.

 

[Twigg4075]

What was the last good game they made? And do they still own Yukes? I remember Yukes killing shit for them cuz of the WWE games. Not so much these days huh?

Also, THQ had a mini monoploy on the moto-cross genre. Bad genre to rape in huh...lol

Saints Row 3 came out three months ago...

Yup. Plus Ref Faction Armageddon came out in the Summer I think. And Warhammer 40K: Space Marines came out in September I think and it;s a damn good game.

That was the only Saints Row I didn't like, to be honest.

You apparently hate fun. SR3 is easily the best of the three games.

 

[Twigg4075]

Consider me out of the loop then.

That's what happens when you have 17 kids and host wine and cheese tasting parties weekly.:ionno:

 

[IamMedellin]

How THQ Went From Bad to Very Bad

In 2007, shares in publisher THQ were going for over $30 a piece. Today, in 2012, they're going for around $0.70. Studios are rumoured to be on the chopping block. Over 200 employees are being let go. And the company's boss has taken a 50% pay cut.

How'd it all go so wrong?

Easy. THQ has been one of the most poorly-managed publishers in recent memory. What was once a troubled second-tier publisher (in 2008 it closed five studios and sold a few more off) got it in its head a few years ago that it wanted/needed to compete with the big boys, the EAs and Activisions of the world, and figured the best way to do that would be to spend money. A lot of money. Blockbuster money, the kind of money it couldn't back up with blockbuster games.

So, naturally, things went wrong.

Things like this:

Blood Sports. THQ has a lot of money tied up in the licensing and development of games based on professional wrestling and UFC mixed martial arts. So much so that the licenses for both the WWE and UFC cost almost as much (with the UFC deal's dollar terms unknown, maybe more) than THQ is currently worth.The former games are...OK, the latter pretty damn good. But they've over-invested in a market that's always going to be a niche one, meaning the chances to make a ton of money, ala EA Sports, were always slim.

No Kids Allowed. THQ were once masters of the licensed kids games, thanks to their deal with Disney. And THQ used to make a lot of money from kids games. THQ doesn't make Disney games any more, though, and in fact doesn't make kids games at all, having closed down its last remaining family developers last year. It's a black hole in the company's finances it's been unable to fill.

Red Faction. A few years ago, THQ brought back the Red Faction franchise with Guerilla, an open world game with a robust physics engine. It had its problems, but it sold well, reviewed well and had a lot of promise for a sequel. That sequel, Armageddon, proceeded to improve nothing, and indeed in many ways removed the best bits of Guerilla. It was so poorly received that it contributed to the premature shelving of the entire franchise, only a couple of years after it had seemed on the cusp of bigger things.

Red Faction, Part Deux. Oh, but it wasn't just the games world where THQ blew it with Red Faction. It also thought it would be a good idea to make a TV show about it. Not one based on the awesome Guerilla, though. It made one based on the awful Armageddon. The show was equally awful, which is why you probably never saw it, or had even remembered it existed until now. Sorry. Way to blow a franchise's chances at multimedia cross-over, THQ!

Homefront. A disaster. THQ marketed this game as a serious contender to the military shooters coming out of Activision and EA. The thing is, Activision's shooters are made by Infinity Ward and Treyarch. EA's are made by studios like DICE. THQ's shooter was made by...the guys behind Frontlines. Homefront did a few neat things, especially in multiplayer, but it was a short, linear, boring and occasionally stupid/insulting game. The gulf between the amount of marketing behind the game and its eventual quality perhaps best sums up THQ's problems of late; namely, you can't just throw money at bad games and hope that'll make them better.

uDraw. A bizarre, and if accounts are to be believed, devastating business decision. Nobody ever asked for a tablet drawing device on modern consoles. And nobody ever bought one. The fact this thing even made it off the drawing board, let alone got to the stage where it was costing millions of dollars, is baffling.

Warhammer. Another example of THQ not really understanding a license, or its market potential. Warhammer 40K is a storied franchise, one that's very popular in Europe, but it's not so big in the US, limiting its global appeal. To have stuck Relic - one of the world's premier developers - on the license for so long is like grinding metal. The Dawn of War games, and even the latest Space Marine title, were always going to hit a glass ceiling because of that license.

Because of these and other missteps, the recent history of THQ reads like a stab victim slowly bleeding to death. Since recording massive earnings in 2006-07 on the back of licensed kids games, THQ has closed five internal studios (2008), sold another (Big Huge Games, 2009), sacked developers in both the US and UK (2010), cancelled an online WWE game and closed its Korean outpost (2010), sold its mobile business (2011), closed two more studios (Homefront developers Kaos and THQ Warrington), killed the Red Faction franchise (2011), closing two more internal studios (Blue Tongue and THQ Australia, 2011) and killed its MX vs ATV franchise (2011). This year, its sacked 240 employees and been threatened with expulsion from the Nasdaq stock exchange, and also faced accusations it cancelled its entire 2014 lineup, along with the cancellation of the long-in-development Warhammer 40K MMO.

So, what's the problem? Why all the closures? It keeps coming back to the argument that it's all management's fault. Many of the studios above made good games that sold pretty well! Yet there's a delusion on the part of THQ, and you see it everywhere from its marketing spend to the size of its booths at trade shows to the licenses it spends millions on, that its games are awesome, and that they sell millions. Which they don't.

In other words, THQ's management is writing cheques its games can't cash.

On the bright side, it's not all doom and gloom for the company. Saints Row the Third was well-received last year. Relic's games continue to be excellent, even if they're not selling as well as they could be. The hiring of Prince of Persia and Assassin's Creed mastermind Patrice Desilets was a coup (though, again, giving him his own giant studio must have cost a mint), as was inking a deal with iconic developer Tomonobu Itagaki to develop his action title Devil's Third. And getting a developer with a proven track record in first-person games, Crytek, to develop a Homefront sequel was the kind of idea THQ needed to have for the first game.

But is that stuff too little? Or, in the case of Desilets and Devil's Third, too late? You could argue that we should all hope it isn't, but then, with the way THQ has been managed (and the way it's been wasting money) in recent years you could also say it might be better for developers like Relic, Volition and Desilet's new Canadian team to be working under someone else's banners.

http://kotaku.com/5881479/how-thq-went-from-bad-to-very-bad

Consider me out of the loop then.

1ke!!!!!!!!

 

[Twigg4075]

That's basically verbatim what both CAG and Giant Bomb have been saying about THQ on their recent podcasts.

 

[SethMode]

SR3 < SR1 & 2? That is insanity. It's crazier, more fun, AND (absolutely most importantly) controls WAY better than both. I didn't think I would ever see someone arguing that it wasn't the best. Especially that it wasn't as good as SR1.

 

[Twigg4075]

SR3 < SR1 & 2? That is insanity. It's crazier, more fun, AND (absolutely most importantly) controls WAY better than both. I didn't think I would ever see someone arguing that it wasn't the best. Especially that it wasn't as good as SR1.

Exactly. Potatoes needs his head examined.

 

[1ke]

I love Strike Team. Never forget it. Yall been killin me....Lol

 

[SethMode]

So, reading the article by Klepek on GiantBomb...I honestly did not realize how much of a failure uDraw would be. In fact, I had no idea what it even WAS until it was mentioned on the Bombcast like 3 weeks ago when this first was mentioned on there. As I read up on it, I'm a little baffled as to why they would think the idea WOULD work on anything but the Wii.

 

[BrntO4Life]

Here are the most interesting bits I jotted down from today’s call:

- THQ lost roughly $30 million on their high-definition uDraw bet.
- Confidence was misplaced on uDraw, but it was a catalyst to “evaluate our business from top to bottom.”
- THQ has ceased production of uDraw hardware, has a plan to move the rest of the units through retail channels, but has no further plans for uDraw.
- The plan is to now “transform THQ into a smaller, more agile entertainment company.”
- Looking toward the future, it “intends to launch new franchises as future platforms are introduced.”
- Saints Row: The Third represents largest “owned IP” launch in THQ history.
- uDraw was approximately $100M below expectations.
- THQ’s quarterly earnings would have doubled without uDraw in the mix.
- THQ is going “to be a smaller company,” and next year, net sales should be “roughly half.”
- Darksiders was not marketed aggressively enough, but Darksiders 2 will “build on the quality of the experience,” and THQ hopes to elevate the brand into a “mass market event” by doubling marketing.
- Characterized Metro: Last Light as a sequel to a game that was a “high quality title that had very limited marketing,” and delaying the sequel to “fully realize the value of this hidden gem to enhance and polish the gameplay.” Also, way more marketing.
Homefront ultimately shipped nearly 3 million copies, and sold 1 million in its first week.
- THQ said Homefront’s online consumer experience “suffered from technical issues.”
The upcoming Warhammer 40,000: Dark Millenium Online is a game where THQ has to be “realistic about [their] resources” and is seeking a partner to work on the game with.
- uDraw was meant to be a bridge to “core to digital future” and turned to be a “plank.”
- THQ now has “very realistic expectations” (read: lower) for future sales of games.
- As for Patrice Désilets next game, he’s still in “early pre-production on his project,” and there will be more detail on that “at the right time, but he’s “pleased with progress at building the team.”
- In addition to collaborating on the MMO, Relic is “highly focused on RTS.”
As for the future of Saints Row, Volition is “dedicated to the Saints Row franchise.”

Hard to believe such a stupid concept nearly killed the company.

As I previously stated, I think this will benefit THQ in the long run. They have some really promising titles in the pipe that, really, just need better marketing. Looks like we will see that soon.

 

[Golden Taters]

SR3 < SR1 & 2? That is insanity. It's crazier, more fun, AND (absolutely most importantly) controls WAY better than both. I didn't think I would ever see someone arguing that it wasn't the best. Especially that it wasn't as good as SR1.

Exactly. Potatoes needs his head examined.

Maybe I need to finish SR3, but I just can't get into the game. The first two I thought were incredible, though.

 

[Twigg4075]

Maybe I need to finish SR3, but I just can't get into the game. The first two I thought were incredible, though.

Yes, yes you should.

 

[calgaryballer]

Just as long as someone continues making solid Warhammer 40K games, I will be happy. Dawn Of War is a fantastic squad RTS and I finally bought Space Marine yesterday

 

[Twigg4075]

Just as long as someone continues making solid Warhammer 40K games, I will be happy. Dawn Of War is a fantastic squad RTS and I finally bought Space Marine yesterday

I'm sure continuing to make PC only games is right at the top of THQ's list to help them get out of this hole.:bazookajones: