THQ has 6 months to live

We?ve seen it happening more and more recently – large publishers losing profits, studio closures and wide-scale redundancies. Publishers are taking quite a beating in today?s gaming market, with what appears to be very little they can do aside from cutting down on costs in order to boost themselves financially. We?ve recently seen Sony do this, but THQ has been doing this for a while with no luck.

The current story of THQ is a sad one. Having made games previously such as Red Faction and Company of Heroes, they were doing pretty well for themselves. Recently, they?ve hit shaky ground, to the point that the CEO of competing publisher Take-Two claimed that they won?t last another 6 months.

As well as facing delisting from the NASDAQ, THQ have suffered a number of sale failures, most notably theuDraw tablet game for the Nintendo Wii. The gaming giant took a turn for the worse at start of this year, as the publisher sought to quickly quash rumours regarding the cancellation of new Warhammer 40k game, Dark Millenium Online, providing the facade that the company was still staying strong.

In response to the recent hardships faced by THQ, CEO of Take-Two Interactive, Strauss Zelnick, added his insight regarding the future of the company, stating that THQ?s strategy focused on building games around licensing, such as THQ?s UFC and WWE games, as opposed to owning their own intellectual property. Additionally, he stated that the quality of THQ?s games are just not up to standard, claiming that ?THQ won?t be around in six months.?

While Zelnick?s very public comments on his competitor at the MIT Business in Games Conference possibly could have been done more tastefully, the fact of the matter is that Take-Two have been arguably more successful than THQ, being able to boast more lucrative big-budget titles that probably land on more must-have games lists than THQ. Currently, Take-Two Interactive are responsible for the big titles coming from both Rockstar and 2K Games, including Bioshock Infinite, Borderlands 2, Max Payne 3, Aliens: Colonial Marines, and highly anticipated Grand Theft Auto V. Compared to THQ whose largest titles recently have been Saints Row: The Third and the Warhammer franchise, as well as upcoming apocalyptic action title Darksiders II garnering some interest, Zelnick may have a point.

In response, THQ contacted Joystiq stating that ?obviously, Mr. Zelnick?s perception of THQ is outdated and inaccurate. His comments are irresponsible and false?. However, when THQ?s stocks finished trading at only 51 cents, compared to Take-Two?s $15.27 before the Easter break, in addition to 240 staff redundancies, and a confirmed pay cut of 50% for THQ CEO Brian Farrell only a couple months prior, it?s hard to argue that THQ are still going strong.

The closure of THQ would mean not only the fall of the core publisher and their titles, but also the loss of licensed titles such as the Ultimate Fighting Championship series, and Games Workshop?s Warhammerfranchise. Gamers had already lost the MX vs ATV franchise with the closure of THQ Digital Phoenix studio in Arizona as the publisher attempted to restructure in order to concentrate on their core titles. Many Disney-Pixar, Nickelodeon and Bratz titles are also part of THQ?s repetoire. Obviously, not all gamers are going to be in an outcry that they can?t play the next Bratz saga, but realistically, there is a demographic that purchased these games. However, it?s not hard to imagine that these lesser titles wouldn?t have helped THQ?s financial situation.

Currently, THQ largest upcoming title may be Darksiders II, as next core titles such as WWE ?13 and Metro: Last Light are slated for a 4th Quarter 2012 and 1st Quarter 2013 release respectively, both falling outside of Zelnick?s projected timeline for the company staying afloat.

Whether THQ will require further ?restructuring?, otherwise known as large-scale redundancies, or whether they will be able to hang on with Darksiders II release until later in the year, is yet to be seen. At this point, THQ is sinking in the quicksand, as it looks like no amount of their recent struggling has been able to pull them out of the financial crisis the company has stepped in. And if THQ is the first of current major publishers to go broke, it definitely would serve as as a great example to other companies in terms of what strategies they perhaps should and shouldn’t adopt in the way of staying alive.

It would be sad to see some of these titles go, but considering the success of Take-Two and the right choices that Zelnick has made so far, it wouldn?t be surprising if he bet right, and we get to see the collapse of what used to be a great publisher in the gaming industry.

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