This news is speculation, but still heavy speculation at this point. Don't assume this is fact. Even rumours can be worrisome.
Not even a year gone and THQ has horribly reversed that pre-Homefront positivity. Before the North Korean invasion tale came out, many sites praised the publisher for trying something new. That lead to Homefront becoming THQ's most pre-ordered title, and seemingly beginning the publisher's transition to prominence. But the pre-release buzz quickly faded after review scores weren't as expected, touting a three-hour main campaign and lackluster multiplayer.
Now the company is looking for buyers.
After Homefront, the stock price tanked. According to rumours, what commenced was an irrecoverable spiral now priming the company for imminent doom. The consequences are dire: THQ is forced to cancel its entire 2014 lineup, and titles like Darksiders 2, Devil's Third and others are questionable. Another major victim, reportedly, is Warhammer 40K: Dark Millennium Online, an MMO in development at Games Workshop.
This news comes from the word of Kevin Dent, though until THQ confirms no one should assume anything. Regardless, the potential loss of THQ is a major blow to the gaming industry.
This news isn't entirely surprising, but the timing is throwing many people off. Saints Row: The Third received favourable scores, its WWE brand was recently relaunched, and set for this year are UFC Undisputed 3 (February) and Darksiders 2 (June). Things were going well, or so we thought.
THQ's closing would be an unspeakable loss to an already fragile industry. Of course, the future of many franchises and studios are undetermined at this point, but THQ has many reputable names under its belt. Seeing the company slice-and-diced, though, would be like witnessing the Scramble for Africa.
Honestly, if this revelation is true, I wish everyone at THQ the best. The buyers will come rolling in, probably Activision or EA, to save the remaining assets. The only possible good thing about this whole ordeal is Saints Row 4 mocking this into obscurity. Jeff out.
UPDATE: It's come to my attention that THQ has denied the rumours, but what happens remains to be seen!
This is one of those cases where I wish games journalists had some kind of qualifications in business journalism before they try and be business journalists.
ReplyDeleteThey report on rumours, and then justify the rumours with non-existent or blatantly incorrect evidence. Here's some clarifications:
1) THQ's share prices suffered before Homefront was released, after it got lackluster reviews. The game itself was a commercial success, from the reports I read.
Good enough to justify a sequel at a time where THQ canned sequels.
2) THQ shut down some studios, but that was because of a change in company strategy. That kind of thing happens often. Activision did it. No one was crazy enough to claim Activision was going out of business.
And just as a clarification to your article (the former two don't apply to you, just the millions of crazy reports I'd seen out there): Games Workshop is the owner of the Warhammer brand. It makes miniatures for tabletop wargames. It is not the developer of the MMO.
Here's the reality. THQ has had a fairly tough year, which has forced it to refocus its energies away from those brands that would put it in direct conflict with the bigwigs of the industry. No publisher in its right mind wants to bet the house against competing with Activision or EA. So THQ has decided to focus on its lucrative wrestling license, where it is the dominant player, and movie licensed titles, which turn over good money for risk-free investment.
It bet somewhat on the uDraw, which was an unfortunate setback, but until that device released, THQ was actually forecasting a record Q3 or Q4 (can't remember which) this year.
99.99% of the games journalists out there, including the entire staff of Kotaku, have not spent enough time working for Bloomberg or Forbes to be in any position to question THQ's viability as a company. For it to then report on a rumour, without having a clue what it's talking about, is grossly irresponsible (albeit typical) games journalism.
Now, if THQ does announce it's going into liquidation, I'll eat my shoe. As I'm rather fond of my shoes, and I am a qualified business journalist, I'm reasonably comfortable with my understanding of THQ's position.
Is a shame, they've been around for so long and now this is happening. I found this link on a forum -
ReplyDeletehttp://www.f4wonline.com/more/more-top-stories/96-wwe/23803-thq-issues-statement-regarding-its-future
- a statement from THQ saying they're not cancelling their 2014 lineup, but who knows what could happen between now and then. Interesting post :)
GamesAndBiz:
ReplyDeleteIt's true stockholders were worrisome of THQ's ability to perform before Homefront came out, but the stock hadn't dropped so dramatically. After the game's release, the stock dropped from $6 to where it stands now at 66 cents. The game did sell well, but that is the power of review scores in today's environment.
And to your second point, I agree! (And thanks for the clarification of Vigil Games, not Games Workship. After this comment I'm changing that.)
Honestly, I have to disagree with you. Of course there is no way for video game journalists to gauge a company's viability nor do we need to. If there's a rumour out there, it should be reported on, but presented not as fact. That's why most great games journalists would also make awesome fiction writers. Not business journalists. :)
(Possibly you can give me some tips into the world of professional business. I've always been fascinated watching CNBC and Bloomberg.)
Oliver:
Thanks for the clarification. I hadn't noticed that. But a rumour starts somewhere and for some reason, so every claim (even the outrageous ones) do deserve some believability before we pass judgment. Anywho, thanks for the comments. :D
Hi Jeff,
ReplyDeleteIt's important to note that while a company's stock value is indicative of its health, it's not absolute. With the amount of change that THQ went through this year, of course its stock plummeted. But again it was projecting a record (and profitable) quarter before uDraw underperformed. The company has consolidated itself down to a less risky position, so I would expect the stock to begin to rebound in the coming months.
Assuming that they're run well going forwards, naturally. I actually believe in the CEO. I think he's got a good idea on what THQ needs to do as a small fish in a big pond.
If you're interested in learning about business, Bloomberg is a good resource (I recommend subscribing to Bloomberg Business Week. A cheap subscription, and the content is really good in there). Otherwise, just do a lot of reading of business books and theories, and whenever you can, talk to C-level execs about what they do. As a website owner, you'd be surprised on the kind of access you have to those people if you ask :)