THQ takes heavy losses relying on the next fiscal year for there survival!

[Joelcool7]

theRepublic said:

Joelcool7 said:

Earlier this year THQ stated they were shifting from publishing several decent games to focusing on releasing just a few big AAA+ games. This shift meant THQ planned to release between 2-4 big games.

 

This make no sense to me.  Concentrating your risk like this means that just one flop could severely damage the company.

I see their point. If your licensed IP are not selling enough copies to turn the company around drastic action needs to be taken. THQ's internal IP like Saints Row are capable of selling almost triple what the licensed IP are and without royalties and issues to work around. Lately the licensed IP just aren't capable of selling enough to turn the company around.

The publisher also had so many studios. Too many studios which didn't produce high selling software, the quality of the software was in decline and if THQ had maintained all these studios they would face immediate demise. THQ couldn't have maintained these studios much longer and the games they were making were not capable of turning the publisher around or helping maintain the studios.

In the end THQ had to make cuts. They could have cut like 30% of the staff at all of their studios to shave off the amount they needed to cut. But then those studios wouldn't be able to release the games as fast and they would be spread thin trying to continue developing as many licensed titles as they used to.

Essentially THQ realized that it had to make cuts. Its better to cut the studios producing lisensed software that isn't breaking even and pour your remaining money into the franchises that either are making you money or are capable of making you money. Fact is THQ has relied so heavily on lisenses for their income that they lack any IP capable of bringing in the funds they need to turn the company around.

As such THQ is focusing on releasing their own internal IP. Hopefully creating another strong franchise or two like Saints Row. By expanding its strongest studios and putting the focus entirely on creating high selling high quality software rather then tons of lower quality software which sells less they have a better chance of turning things around.

Unlike other publishers THQ doesn't have the IP to sell off they also don't have many studios capable of producing high selling high quality IP. They could go the way of Atari and close almost all their internal studios focusing entirely on third parties to support them. Or they could give up big budget games all together in favor of trying to keep the company alive with those less successful licensed titles. Or perhaps the company could do what it is doing and focus on higher quality higher selling software.

Its a desperate move, really risky. However I would say they have little choice in the matter!