Future of THQ is in question...

juv3nal wrote:

Who looks at uDraw and thinks "this is the thing we are going to bet heavily on" that's madness.

When they released it on the Wii, it actually sold gangbusters its first year and they couldn't produce them fast enough. So they thought based on that result that the audience for the HD consoles also wanted it as well. So they built up a huge inventory of those units before knowing how well they'd sell and when nobody bought them, they had to heavily discount them to near or below cost just to get them out of the warehouse. Their plan was for the uDraw to become its own platform but aside from a few initial titles that they financially backed the development of, no other studios cared to write anything for it. It was just a complete boondoggle by clueless management.

Things looking progressively worse (well played on the logo/image though, even if it was the obvious way to go)

More news.

Today's awful news comes from THQ's SEC filing, which came just a day before the company's scheduled financials call, in which Farrell is expected to be on the hot seat from investors after the dismal last several months the company has endured. The filing shows that in order to make good on the publisher's current restructuring plan, 240 employees have been released from various sections of the company. Curiously, THQ proclaims that none of its five, wholly owned studios were affected by the cuts, which begs the question of where all those cuts came from.

From what I'm seeing in this article, and elsewhere, is that THQ is cutting its licensed kids games and focusing on core games.

I think this is the best thing THQ could do at this point.

Well, the best thing they could do is fire Brian Farrell whose "leadership" is what got them to this point. Rather than kick him to the curb, he's "graciously" agreed to take a 50% pay cut for a whole year. If he's still running the show, I think their chances of recovery are slim.

Won't someone think of his family? How can he feed them on ~$600K a year??

The alternative to that CEO is they would need to get another CEO. I don't think I've read anyone with a good plan to turn THQ around, and who would want to be captain of a sinking ship with the aim of keeping it independent? I'm sure the vultures are circling.

TheGameguru wrote:

Won't someone think of his family? How can he feed them on ~$600K a year??

It gets worse! After his cut, it's $372K (plus bonuses of course, I think may made well in excess of $1M last year). The poor bugger.

Parallax Abstraction wrote:
TheGameguru wrote:

Won't someone think of his family? How can he feed them on ~$600K a year??

It gets worse! After his cut, it's $372K (plus bonuses of course, I think may made well in excess of $1M last year). The poor bugger.

sh*t...he will be forced into the welfare line for sure...

Maybe I should step up to run THQ. I mean, it can't get much worse there and though it would be hard, I think I could subsist on $372K. What say you THQ investors? I don't have much experience but I do have one failed small business attempt behind me and I have read The Economist a few times.

Parallax Abstraction wrote:

Maybe I should step up to run THQ. I mean, it can't get much worse there and though it would be hard, I think I could subsist on $372K. What say you THQ investors? I don't have much experience but I do have one failed small business attempt behind me and I have read The Economist a few times.

Do you invest in THQ or something? Were you employed by them and got cut? You seem to be a little immature about this CEO pay thing. I'll back that statement up by saying, comparatively, to my knowledge at least (real confident in myself eh?), most people in that situation would keep their ridiculous pay, let the company burn to the ground, and laugh all the way to the bank. Does one need $372K to survive in this world? No. However, I respect when someone takes a greater than fifty percent pay cut to say, "Times are tough, I f***ed up, here's how this can work moving forward."

It sucks that people had to lose jobs, but if it really boiled down to them getting rid of a lot of children's games and marketing people: that was part of THQ's problem in the first place! Those children's games and THQ marketing in general were trash.

I'm pretty sure we are all joking... most people realize here that all the faults of the company though ultimately have to lie with the CEO first and foremost.

Yes, I was most definitely joking.

As GG said though, Farrell is supposed to be the first word when it comes to accountability of the company, that's what the CEO job entails. The thing is, I get that many of those layoffs were for getting out of the kids business but it's Farrell that kept them in that business long after it stopped being profitable. He overpaid for a number of kids licenses just to secure them and a lot of them either were never used or were given back before they realised any profit from them. Many believe his poor leadership dating back a number of years is what's put THQ in this position. I want to see the company make a comeback but I don't think that's possible with him at the helm. He's a guy who knew how to milk kids properties for quick profits and has no idea how to run a hardcore-game focused publisher in a highly competitive market. Combine that with the fact that the company has almost no money left and one wonders how they'll even mount the comeback when an average AAA titles takes $30M to make before marketing. Taking a 50% paycut for one year only is a nice gesture but it doesn't solve the core problem which is his leadership. He doesn't need a paycut, he needs to be replaced. Honestly, though Danny Bilson's reign at THQ as VP or Core Games hasn't been perfect by any means, maybe they should give him the job. They're refocusing on core games and that seems to be his bag. I don't know what the right answer is but I'm not at all confident that it's Farrell.

This course of action baffles me actually. I would have thought that the answer was MORE lazy cash-ins on licensed child targeted projects. The "core" gamers want high production value AAA stuff with a development team of hundreds of wage slaves. Kids aren't nearly so demanding.

gains wrote:

I would have thought that the answer was MORE lazy cash-ins on licensed child targeted projects.

Licenses cost money.

gains wrote:

This course of action baffles me actually. I would have thought that the answer was MORE lazy cash-ins on licensed child targeted projects. The "core" gamers want high production value AAA stuff with a development team of hundreds of wage slaves. Kids aren't nearly so demanding.

As far as I know, besides f-ups like Homefront and Red Faction, most core THQ games last year turned a profit.

And that's considering stupid decisions like sending SR3 to die sandwiched between Skyrim, Assassin's Creed, Mario, etc. Imagine what a title like that could do if it were actually released / promoted smartly.

Assuming, of course, that they still have the resources to consistently put out AAA releases without risking their entire future on each title. A look at their release calendar for 2012 shows UFC Undisputed (which I hope will succeed if only because my soon-to-be brother-in-law, featherweight George Roop, is in it), Darksiders 2, some South Park thing, some WWE thing, Metro Last Light, something called Devil's Third, and two "unannounced core titles."

Of those, we've got three licensed games, one game I've never heard of, the sequel to a very niche critical darling, and Darksiders 2. Presumably the wrestling stuff should do okay for them, and Darksiders should do well for them unless they go out of their way to screw it up, but it wouldn't take more than one or two really big Homefront-style bombs to sink the company for good as far as I can see.

hbi2k wrote:

but it wouldn't take more than one or two really big Homefront-style bombs to sink the company for good as far as I can see.

Just an FYI, Homefront turned a profit. Not by much, but it at least broke even.

mcdonis wrote:

It looks like Metro might be a casualty of this.

http://www.rockpapershotgun.com/2012/02/03/thqs-financial-woes-metro-pushed-back/

Vader NOOOOO image tentatively belayed on account of:

The stated reason for the lengthy delay to Metro, which has been pushed back from a summer 2012 release [to 2013], is a need for more polish. Perhaps that’s a positive sign, with the publisher not feeling it necessary to rush titles to release. 4A Games have commented: “[The release] may be a little later than you were expecting, but trust us – the wait will be worth it! You’ll be hearing a lot more about Metro: Last Light closer to E3, so please be patient. We can’t wait to show you what we’ve been up to.”

Did Last light have a release date/window before this?

Scratched wrote:

Did Last light have a release date/window before this?

Summer 2012 was the original expectation according to Wikipedia, but I'm not sure that was ever stated by THQ.

Reporting $56 million in losses, blamed primarily on uDraw:

joystiq wrote:

"Revenues were lower by about $100 million," Farrell explained. "We've got 1.4 million [uDraw units] still in inventory we haven't sold that we planned on selling." He estimated about $80 million of the lost revenue was from units the company didn't sell, and the other $20 million was from lowering the price of what they did sell. He concluded on the topic, "We would have doubled the profitability in the quarter were it not for uDraw."

http://www.joystiq.com/2012/02/03/th...

$372K seems fair to me for a CEO salary, when you consider that they probably employ developers at $100K+, possibly with stock options. If you have to keep hundreds of developers on the right strategic track, and then successfully market and sell the products they make, I'd say making three times their salary is reasonable.

Hell, the old figure wasn't too bad, when you consider what he's doing.

nel e nel wrote:

Reporting $56 million in losses, blamed primarily on uDraw:

joystiq wrote:

"Revenues were lower by about $100 million," Farrell explained. "We've got 1.4 million [uDraw units] still in inventory we haven't sold that we planned on selling." He estimated about $80 million of the lost revenue was from units the company didn't sell, and the other $20 million was from lowering the price of what they did sell. He concluded on the topic, "We would have doubled the profitability in the quarter were it not for uDraw."

http://www.joystiq.com/2012/02/03/th...

I never even heard of UDraw. Now that I have looked into it, they could have paid me $56 million to tell them it was a mind-bogglingly poor idea.

Malor wrote:

$372K seems fair to me for a CEO salary, when you consider that they probably employ developers at $100K+, possibly with stock options. If you have to keep hundreds of developers on the right strategic track, and then successfully market and sell the products they make, I'd say making three times their salary is reasonable.

Hell, the old figure wasn't too bad, when you consider what he's doing.

Game developers tend to not make as much as business developers. I don't think the average is near $100K, from what I've read at least. Your point's still sound though.

Malor wrote:

$372K seems fair to me for a CEO salary, when you consider that they probably employ developers at $100K+, possibly with stock options. If you have to keep hundreds of developers on the right strategic track, and then successfully market and sell the products they make, I'd say making three times their salary is reasonable.

Hell, the old figure wasn't too bad, when you consider what he's doing.

I would agree had his leadership over the last several years not been running THQ into the ground. If the company was doing well, I think earning over a million a year would have been fair compensation. At this point, he shouldn't even have his job, much less a salary like that. In my opinion of course.

imbiginjapan wrote:

I never even heard of UDraw. Now that I have looked into it, they could have paid me $56 million to tell them it was a mind-bogglingly poor idea.

They must have had people internally telling them that too; they just weren't listening to those people.

As I understand it, the UDraw actually did quite well for them on the Wii. It was when they expected that success to continue with the PS360 versions (and cranked manufacturing into high gear as though it would be the new Tickle Me Elmo) that they got into trouble.

Puts stuff like the chronic Wii console supply shortages for years after launch into some kind of perspective, I guess. Better to plan on a moderate success and be pleasantly surprised than plan for a runaway hit, overreach, and get shafted.

hbi2k wrote:

Better to plan on a moderate success and be pleasantly surprised than plan for a runaway hit, overreach, and get shafted.

See also: Spore. Based on the amount of ancillary products/services that were planned (3D creature printing, comic book creator, movie license, numerous spin-offs for consoles, etc.) before it launched, I'd be very surprised if EA's accountants didn't take a long cold shower after the reception was significantly more lukewarm than anticipated.

shoptroll wrote:
hbi2k wrote:

Better to plan on a moderate success and be pleasantly surprised than plan for a runaway hit, overreach, and get shafted.

See also: Spore. Based on the amount of ancillary products/services that were planned (3D creature printing, comic book creator, movie license, numerous spin-offs for consoles, etc.) before it launched, I'd be very surprised if EA's accountants didn't take a long cold shower after the reception was significantly more lukewarm than anticipated.

That's partly because most everyone I heard talk about it were basically "What the f*ck? This game can't do everything I ever imagined possible including giving me a blowjob while feeding me ham and cheese sammiches? What a f*cking rip off!"

Just about all my PC gaming friends bitched about it, and then continued to skip class while playing their pirated copies to death.

Yes. "Horrible" game, for sure.

If their losses are REALLY just from uDraw, then I think they can pull themselves back up soon enough. I think THQ ultimately has the potential to be as big a publisher like Ubisoft one day. They may just need some more experienced business folks when it comes to casual audiences. They seem to be doing decently well with hardcore offerings at least.