Forecasting the Future of THQ’s Core Franchises
It’s no secret that THQ’s fortunes have dropped precipitously of late. Studio closures, cancelled games, terminated divisions and mass layoffs, their ongoing Soap Opera culminated in their quarterly investor call on February 2 that both confirmed and debunked a lot of the speculation swirling around the ailing giant, while also framing an astonishing change in direction that puts the future of several serious franchises in doubt. A brief summary:
* A total of 240 employees have been laid off or soon will b, as of February 2, 2012.
* CEO Brian Farrell has accepted a 50% reduction in salary.
* They have confirmed plans to vastly reduce the size of the company, estimating that when this process ends, they’ll be 50% of their current size.
* THQ Australia, THQ Digital Warrington, THQ Digital Phoenix and THQ subsidiary Blue Tongue have been closed.
* THQ is in the process of getting rid of Play THQ, their kids division, by the end of the fiscal year.
* THQ’s uDraw division will be closed once the remaining tablets are sold or destroyed.
And that’s just the beginning. This isn’t the end of their slashing. THQ has stated that Q4 will be “transitional” as “cost-savings measures” are implemented. Games already completed will be released on schedule as the company winds down, but by the time this process is complete they will be focused solely on what they call their core games, with special emphasis on what they repeatedly referred to in the investor call as their digital ecosystem.
These moves may be necessary, but they leave the company’s future in doubt. Like you, we play a lot of THQ games and we’re wondering where that leaves us in the coming transitional period. We’ve taken a closer look at their upcoming slate of yet-to-be released games, with emphasis on those titles still either theoretical (but assumed), or announced but not yet completed, that count as their ‘core’ franchises, and with the company’s new strategy in mind, we’ve analyzed each game‘s chances for survival. Plan your shopping accordingly.
The Game: Saints Row 4
Developed by: THQ subsidiary Volition, Inc.
Release date: Unannounced but confirmed to already be in preproduction. Likely 2014.
The Saints Row series has been a surprise unqualified successe for THQ. While the first game was a somewhat ho-hum GTA clone, Saints Row 2 brilliantly distinguished the series as a crazy, deliberately unrealistic action movie/crime movie parody that seemed in every way possible to be the anti-GTA. Saints Row: the 3rd continued that tradition in every way that matters and has been THQ’s biggest recent hit.
How big? Saints Row: The Third has already shipped 4 million copies and is expected to ship 6 in its lifetime. And as THQ CEO Brian Farrell said in last week’s Q3 investor call, “We expect Saints Row The Third to achieve the highest digital revenue of any console game in our history”. He further confirmed that Saints Row developer (and THQ subsidiary) Volition is “dedicated” to the series.
Likelihood of release: Simply put, if you think THQ will let this cash cow die, you need to have your head examined. Even if THQ were to fold as a company, Volition would likely be snapped up by someone else faster than you can say “that was smoooooth*”. Saints Row 4′s chances are at 100%. Bet on it.
The Game(s): Licensed World Wrestling Entertainment games: WWE Brawl, WWE ’13, WWE ’14
Developed by: Unconfirmed, possibly WWE ’12 developer Yuke’s
Release date(s): Scheduled TBD 2012, 2012 and 2013 respectively.
Along with Saints Row The Third, THQ’s WWE franchise games were singled out in their recent investor call as noteworthy successes in an otherwise rough year. WWE ’12 met with very low reviews, but it has sold well, with over 2 million units shipped and a sell-through rate up 29% over the previous year. It makes sense then that THQ intends to stand by the franchise, and they have 3 games in the pipeline: WWE Brawl, a cartoony super hero exaggeration of colorful WWE characters, and two upcoming proper WWE games, WWE ’13 and WWE ’14. No delays in release or developmental issues have been reported, or mentioned by THQ, making each game a strong candidate for survival.
Likelihood of release: WWE Brawl: 100%. it’s scheduled for later this year and the first promotional materials are slipping out. WWE ’13: 100% for the same reason. WWE ’14, scheduled TBD 2013 (most likely later in the year); it may be affected by THQ’s shrinkage. We’ll put its chances at 90%. 30 if the company folds.