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Life After Death: The Repercussions of THQ's Demise

TylerColp | 23 Dec 2013 12:30
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The phone line in the building at 29903 Agoura road, Agoura Hills, Calif. is dead. The hundreds of employees the building once housed every day are gone. The life, the ambition, and the fear of a company in a highly competitive market have disappeared. A videogame publisher collapsed earlier this year. THQ is no more.

It wasn't instant. THQ's demise was a series of bad decisions. All it took was one large one to crack the foundation. Most attribute it to the company's uDraw GameTablet, a touch-based tablet that interacted with games on Nintendo's Wii, Sony's PlayStation 3, and Microsoft's Xbox 360. THQ planned to support the device with software every few months. It was the first touch-based input method for consoles at the time. It was also a big bet, as is often the case with big companies. Its failure cost it millions of dollars, specifically $100 million for its 2011 holiday season, a prosperous period for most game companies. And that's not including the hundreds of employees that were cut as a result of its reactionary restructuring.

Others attribute THQ's fall to it's abrupt switch from licensed games based on child-friendly Nickelodeon and Disney franchises to what it called "core" games like Darksiders and Saints Row. It began to focus on fewer games that would sell more. An admirable goal, sure, but ultimately damaging for the company. The transition came at a time it was losing money fast, and it's possible it was too late.

Others attribute THQ's fall to it's abrupt switch from licensed games to what it called "core" games.

When a company as large as THQ crumbles, the ripples travel far. All of the company's internal development studios that it had quickly picked up after its start as a toy business in 1989 - Toy Head Quarters is still the name - were affected. This includes the teams responsible for Company of Heroes, Red Faction, Saints Row, MX vs. ATV, Metro, Homefront, Darksiders, and Dawn of War. All of them were scattered out into the industry after THQ sold off its remaining assets, including a list of dormant intellectual property it owned.

Almost all of THQ's employees were let go in January. A month later, its newly-appointed President Jason Rubin - who joined the company just 11 months prior to steer it in the right direction, Chief Executive Officer Brian Farrell, and Chief Strategy Officer Jason Kay, were out. By April, when the final auction ended, THQ had nothing to its name. All of its games, franchises, and licenses were owned by someone else.

THQ's properties were spread across several publishers. Some found homes and were able to resurface this year, while others are still in limbo.

Koch Media, a German company that owns publisher Deep Silver, bid roughly $22 million for Saints Row developer Volition, and won. THQ purchased Volition, the Champaign, Illinois-based studio partly responsible for creating the FreeSpace space simulation series, in 1998. The studio went on to create the Red Faction and Saints Row franchises under it. At the time of the auction, Volition had been working on Saints Row IV, the sequel to 2011's surprise-hit Saints Row: The Third. It had been working on a piece of downloadable content for the latter game, called Enter the Dominatrix, but under President Rubin's command, it was turned into a full-on sequel.

Some found homes and were able to resurface this year, while others are still in limbo.

That sequel was released in August to favorable reviews and sold over 1 million copies in the first week. The developer is currently pumping out several pieces of DLC for the game, including a director's cut version of the very DLC that spawned it.

Volition's FreeSpace property was bought by Baldur's Gate and Fallout publisher Interplay in June 2013 for $7,500.

Koch Media also acquired the rights to Ukraine developer 4A Games' Metro series, and published the sequel to 2010's Metro 2033, Metro: Last Light. The game was successfully released in May. Its first-week sales numbers surpassed the lifetime sales of its predecessor. 4A Games released the final piece of DLC for the game in October.

Relic Entertainment, THQ's PC developer, was the third company to successfully release a game after the publisher shutdown. Relic released Company of Heroes 2, the latest in its World War 2 strategy series, under its new owner, Sega, in June.

Relic is known for its specialty in making real-time strategy games. It translated the tabletop game Warhammer 40,000 into a series of popular PC games with Dawn of War. It's also responsible for creating the Homeworld franchise in 1999, which didn't make the move with it. Instead, the rights to Homeworld were sold to Borderlands developer Gearbox Software. Gearbox has plans to release high-definition remakes of the first two games in 2014.

It's unclear if we'll see another Relic Warhammer 40,000 game any time soon. The rights to publish the games are granted by Games Workshop, which already has a few developers working on projects in the franchise.

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