March 2, 2009

Report: Analyst Puts THQ Bankruptcy Chances At 50/50 

THQ has a 50/50 chance of declaring bankruptcy, according to new comments made by Janco Partners analyst Michael Hickey.

"You have mediocre product and you’re running out of cash," Hickey told the Los Angeles Business Journal. "Not the situation they want to be in right now."

In February, THQ reported $191.8 million in losses and a 30 percent drop in revenues, prompting a 24 percent staff reduction of around 600 positions. In the last ten months, the company’s share price has fallen from $20 to around $2.

"I know that makes for good print and sells newspapers, but those aren’t the kind of things we focus on right now," said THQ CEO Brian Farrell in response to Hickey’s comments. 

"When the stock price is depressed, the naysayers can have their day in the sunshine. But we have a plan that we’re very confident will give us cash and return the company to profitability."

In the same report, Farrell refused to comment on whether THQ would bid on the Disney-Pixar movie license when it comes up for renew shortly, saying only: "Disney and THQ have been great partners for many years, but it’s got to work for both sides."

Up to one-fifth of THQ’s revenues come from Disney-Pixar licensed games -- and THQ’s current contract only covers the next two movies, one of which is Up. 

However, Farrell said that THQ was looking for backers for a new line of credit, to use as a fallback measure if current plans go awry. Currently, the company has no credit line -– only $26 million borrowed as a form of long term debt to ensure liquidity.

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Bleh, looks they are quite in a pinch ATM. And not one that's easy to get out of, unless you get more good stuff to sell... or loans (that you won't be able to return unless.. you get stuff to sell =P )

If I remember correctly, THQ used to be the 3rd largest publisher of games in America? and now could be bankrupt..? that recession+primary HD development for ya... and they won't be the only ones.

Discuss.

http://www.gamasutra.com/php-bin/news_index.php?story=22515

Third parties are suffering big time. I wonder which will survive in the end.

I don't like to see Deadly Creatures failing, its a good game. But very nich esque.

Few people like the type of that game.

They need to focus on a very reliable platform right now (DS and iPhone seems good) and drop there some good games to cash-in.

And they should STOP making games for HD consoles just to say that they are Hd developers. In crisis, a small dev making HD games is pure suicide.

Nooooooooooo!

UFC 2009 must come out!

probably loss quite a bit on deadly creatues as well. as god as it was them doing something different and all i think they should have gone with something more traditional. some sort of saints rown game released over the holidays would have done well i feel

WTF !!!!!! why couldn't this be square-enix

This is what happens when Will Farrell's brother is a CEO of a company.

I love this economy crisis!
It's like evolution in action! The poorly led companies go bankrupt, the decent ones too, or they barely survive, but the greatest ones stay, and inherit what is left after the storm!

I wonder how bad things would be without the 700k in sales for de Blob.

Of course, considering the source on this is Patcher, we must take it with at least a small grain of salt.

Really? oO