THQ files for bankruptcy

Game publisher THQ has filed for bankruptcy. Worry not, though. The firm has already found an investor interested in buying most of its assets. According to a community message posted by THQ President Jason Rubin, Clearlake Capital Group wants to purchase “most of what you think makes up THQ,” including development teams, intellectual proprety, support staff, and contracts with external developers. Clearlake is apparently willing to fund THQ’s operations while the bankruptcy proceedings play out, and it’s committed to investing “additional ample capital” going forward.

Just because THQ has an offer doesn’t mean Clearlake will end up with the company’s assets. The bankruptcy proceedings allow other bidders to throw their hats into the ring, and we won’t know how things shake out for another 30 days. Rubin expects the teams working on upcoming titles like Metro: Last Light, Company of Heroes 2, Homefront 2, and the the next Saint’s Row game to remain intact, however.

THQ made headlines a few weeks ago by contributing games to a Humble Bundle. That promotion raised $5 million, but it’s unclear how much of the total was allocated to THQ—clearly, not enough to save the company from chapter 11.

Interestingly, the Humble Bundle experience does have THQ considering Linux support for upcoming games. Rubin told Polygon that THQ shouldn’t overlook the Linux gaming community, and that it’s weighing options for porting titles to the OS. The extent of THQ’s future Linux efforts likely depends on on the results of the firm’s bankruptcy proceedings. It would certainly be nice to have another big-name gaming company committed to the alternative OS.

Comments closed
    • rrr
    • 7 years ago

    Hey, pirates, are you proud of yourself? Next up Activision, then EA Games…

    Oh, wait…

    • moog
    • 7 years ago

    The Death of the PC!

    • ShadowTiger
    • 7 years ago

    I have actually been following this story for a few months. Apparently THQ has 1000 employees and spends about $15 million / month.

    That means that they need a big cash infusion to keep going until March or April when their games are supposed to be released.

    It also means that the humble bundle is not very significant for keeping the company in business. They need to release SR4 or CoH 2 to get a big chunk of cash… probably $100 million each.

    Linux ports of their games is a pipe dream… it will never be cost effective. They are just saying that… to placate fans or maybe because they really never bothered to check how much it costs… seems kind of lazy though.

    source:
    [url<]http://www.videogamer.com/xbox360/south_park_the_game/news/thq_cfo_resigns_as_company_enters_credit_agreement.html[/url<] [url<]http://www.macroaxis.com/invest/ratio/THQI--Number_of_Employees[/url<]

      • HibyPrime
      • 7 years ago

      That is an absolutely ludicrous amount of money to spending on a monthly basis for a publisher.

      According to that site $10M of that is for R/D, meaning not for advertising, expansion and that sort of thing. I can’t see a publisher/development company spending R/D money on anything besides paying developers, insuring them, and giving them tools (computers, desks, etc.). If even 2/3 of that R/D budget is being used to pay actual people, then they’re averaging $80 000/year per employee. That is ridiculous.

        • MadManOriginal
        • 7 years ago

        $80,000 per year is not ridiculous when a lot of the employees are software engineers who live in developed countries.

        • GatoRat
        • 7 years ago

        What R&D means to you and what it means for tax purposes are two different things. In the US, there are tax credits for doing original technical research, which included development on products that have not yet been released, versus enhancements and/or bug fixes for products which have become available to customers. This would mean that significant chunks of CoH 2 and SR4 are part of the R&D pool of money.

        Finally, $80,000 per employee isn’t ridiculous at all. By the time you add in facilities, benefits, taxes, equipment and other overhead, an employee at any high tech company will cost at least $15,000 a year. Good developers cost $80,000 a year minimum in salary, top developers $90,000+. Top testers will run close to that (and are invaluable.) Then you have writers, product managers, project managers, facilities people, accountants, marketing and sales, all of whom are skilled workers and require decent pay if you want their jobs done right.

        Unfortunately, THQ blew a lot of money on a highly misguided online effort and made several other blunders which not only cost money, but resulted in a massive opportunity cost for those game titles that were held up. Company of Heroes 2, for example, should have been released last summer. That likely would have provided the cash flow needed.

    • Bensam123
    • 7 years ago

    I hope CoH2 and Metro LL get out the door. That’s pretty hardcore if they went into bankruptcy while allowing those games the extra time for release. If I remember right, they were actually given extra time to complete their games, as they were supposed to be released this fall. Most publishers would’ve forced their arm and just said ‘patch it’.

    If only nix had any sort of revenue stream involved with it, I’d agree. Only Valve has the capital to blaze that trail.

      • brute
      • 7 years ago

      they may have the capital to blaze, but gabe ate all the snacks. munchies are distracting????

      • TurtlePerson2
      • 7 years ago

      Both Activision and Microsoft have way more cash than Valve.

        • Bensam123
        • 7 years ago

        MS wont make games for a competing OS, let alone one that may steal console sales. Activision has trouble making meaningful titles now days even if they have deep pockets (baring CoD and WoW).

        THQ is both a publisher and a developer in some cases, just the same as Valve is.

          • sweatshopking
          • 7 years ago

          [url<]http://www.macrumors.com/2012/12/22/microsoft-releases-wordament-the-first-iphone-game-with-xbox-live-achievements/[/url<]

    • odizzido
    • 7 years ago

    While THQ actually makes good games, I am not going to shed any tears over a company that pushes DRM on me.

    • setbit
    • 7 years ago

    *property

    • MadManOriginal
    • 7 years ago

    CoH 2 is available for pre-order on Steam. o_0

    • brute
    • 7 years ago

    what does THQ stand for anyway?

      • brute
      • 7 years ago

      Toy Head Quarters

      all hail the wiki pedia

      • superjawes
      • 7 years ago

      [url=http://lmgtfy.com/?q=what+does+thq+stand+for<]Let me Google that for you[/url<]

    • Chrispy_
    • 7 years ago

    I’m not surprised after seeing THQ on the humble, not-so-indie, bundle last week.

    First thing that crossed my mind was “they must be [i<]really[/i<] desperate" Publishers die because they're fat cash cows that milk franchises to death when what they should really be doing is hunting for and supporting innovation, new IP and something that isn't just a regurgitation of what's been done before.

      • BestJinjo
      • 7 years ago

      And what kind of games did Company of Heroes, STALKER and Metro 2033 rehash exactly? Company of heroes is arguably the best RTS game ever made, Metro was based on a novel and STALKER is partly inspired by a novel/a movie and the Chernobyl nuclear reactor explosion. I can see how Saints Row is a copy of GTA but that’s about it.

        • thanatos355
        • 7 years ago

        I’ve always seen SR more as an over the top parody of GTA. Tongue in cheek sort of. Homefront had some very cool ideas it played with as well. Nothing incredibly original, as a whole, but the way it put the pieces together made for a fun time.

        • Chrispy_
        • 7 years ago

        CoH is great, no complaints there
        Darksiders has a lot of potential. It felt a little rushed but overall I was impressed with it.

        Metro is the spiritual successor to STALKER when CVG split up, with many of the same design team on a rehash of the same engine. Whilst fun, it’s basically a franchise continuation even if the original company went bust, THQ picked up the pieces and basically cloned the basic gameplay with just enough new stuff to avoid lawsuits.

        Saint’s row is fun, but it’s hardly what you could call innovative or fresh when it’s a sequel of a sequel of a sequel of a clone of a sequel of a sequel.

        THQ milked the Red Faction franchise to death
        I can’t forgive them for SupCom2
        Warhammer has been a mess of expensive DLCs that really should have been a lower number of complete games.

        Titan quest was a rather dull Diablo II clone that barely registered and received low to middling review scores.

        They’ve milked the WWF franchise to death. It’s worse than the annual football games where they change the splash screens and change the rosters to update the current season.

        If you look at the [url=http://en.wikipedia.org/wiki/List_of_THQ_games<]rest of the THQ lineup[/url<], it's almost entirely TV/Movie spin-offs (a recipe for disastrous, low-quality games) and various console ports of other people's games. I'm sorry, but whilst they had a small handful of decent IP's, they had a large number of incredibly bad ones. So many, in fact, that it sunk the company.

          • Noigel
          • 7 years ago

          THQ peaked with the WWF games with “WWF No Mercy” for the Nintendo 64 back in 2000. They changed the game engine, which was the awesome secret sauce, and everything paled after that.

          *still refutes admitting he was once a wrestling fan*

          • rechicero
          • 7 years ago

          Offer some respect for the people that is going to be sacked in Christmas, man. And chapter 11 usually mean layoffs.

          Apart from that I’m playing Titan Quest right now and that’s a really great game. And about DoW, maybe you can skip some expansion but… just skip it if you want. They are really great games (specially DoW2 updated with the first expansion, the original campaign is the same… and much more fun at the same time).

          THQ is probably the company that offered most hours of fun to me (with Paradox… and Origin).

            • Chrispy_
            • 7 years ago

            Welcome to the 5th year of global economic recession.

            Development teams, intellectual proprety, support staff are hopefully being retained. It’s the decision-makers who got it wrong enough to cause bankrupcy that are losing their jobs and reputations.

          • Klimax
          • 7 years ago

          SupCom2 was responsibility of Square Enix not THQ.

        • Noigel
        • 7 years ago

        I can’t speak for the other two but STALKER was amazing when it came out… open-world FPS and awesome atmosphere. The obscure story line and dialogue helped to add to the addictive strangeness of it.

          • Chrispy_
          • 7 years ago

          Agreed. I liked STALKER and I’m enjoying Metro, but it’s hard to call Metro a completely new, 100% original IP when it’s the much of the same design team, the same engine, the same basic theme and very similar gameplay.

          The only reason it’s not being a continuation of the STALKER line is because THQ had a legal spat with CGW. As far as I know, they were still arguing over engine licensing when CGW folded last year.

        • BobbinThreadbare
        • 7 years ago

        THQ’s main money making plan was to license popular IPs and pump out games as cheaply as possible from them. Clearly, it was not a self sustaining model.

        All the games you mention, with the exception of Saints Row were small time side projects for a publisher. PC only niche-RTS? Probably sells around a million units. Cheaply made WWF game? Probably sells around 10 million units until you’ve made 15 of them each seemingly worse than the last and bleed the customer base dry.

    • Voldenuit
    • 7 years ago

    THQ won’t be the last publisher to file for bankruptcy. So what will happen to games with DRM servers when the publisher isn’t picked up? Who has the legal (and fiscal) responsibility to address this problem? The estate? The investors? The developers? The retailers? Things can get very messy in the future, and I can’t help but think it’s the gamers that are going to get the shafting.

      • MadManOriginal
      • 7 years ago

      Any number of things could happen:

      Release code to eliminate the need for DRM.

      Hacks come out to circumvent the DRM and there’s no company to fight against them. (Actually, I’m not sure if that would be a DCMA violation or not. If a hack falls on the internet, and there’s no company to sue, does anyone care?)

      Games keep working fine if the DRM is through a platform like Steam, maybe.

        • indeego
        • 7 years ago

        DMCA has a limited provision that allows for reverse engineering.

        [url<]http://cyber.law.harvard.edu/openlaw/DVD/1201.html#f[/url<]

      • l33t-g4m3r
      • 7 years ago

      Yet another reason people should continually voice their discontent with such games, and vote with their wallets. Although worst case scenario, you’d have to use a crack and wouldn’t have access to any online multiplayer. Individual games may be a problem, but I think the ultimate disaster would be a digital delivery service. Imagine if steam or origin just shut off. You’d be really screwed.

        • CppThis
        • 7 years ago

        Just do what I do and only pay rental prices for internet-DRM rental games. So when Steam finally does get shut off–which it will, it’s a “service” after all–I’ve enjoyed my rental game and didn’t pay $60 for it.

        Anyone who thinks DRMed games are ‘theirs’ is a fool for the reasons Voldenuit brought up–when the plug is pulled nobody’s going to care about all the people getting screwed, as is always the case.

          • rika13
          • 7 years ago

          It has been well-known that when, IF, Steam ever shuts down, then all Steam DRM will be removed.

            • Voldenuit
            • 7 years ago

            Not all games sold through Steam use Steam for their DRM.

            • Geistbar
            • 7 years ago

            If there was a patch that removed the Steam DRM, then the additional DRM would then become the only obstacle — if the servers for the additional DRM still functioned, then the game would be playable.

            Not saying it’s ideal, but if there was a Steam DRM removal/avoidance/whatever tool, then that would be sufficient to allow you to play those games.

            • BobbinThreadbare
            • 7 years ago

            I should note too that Valve has only guaranteed their games would have Steam requirements removed. If another publisher feels like being mean they could ask Valve not to remove the requirement from their game.

            • sjl
            • 7 years ago

            That’s what they’re saying now. But what assurances do we have that this promise will be kept? Do they have a patch ready to go in escrow, to be released in the event that Valve files for bankruptcy, for example?

            History is littered with examples of companies that looked like they were going great guns, only to falter and fail because of issues that were swept under the carpet. I’m not saying that Valve is such a one, only that it [i<]could[/i<] be, and that promises made whilst a company is a going concern could well prove to be hollow if the worst case scenario eventuates. Or, to put it another way, if we're talking hypotheticals, we might as well look at all the possibilities rather than just the ones that paint a glowing, rosy picture of the future. I do sincerely hope it doesn't come to that point, mind. I'm simply pointing out that cheerful optimism is not a substitute for careful examination of what has been said and done to determine how much faith can, and should, be placed in simple assertions.

            • Ringofett
            • 7 years ago

            You make a good point. The only thing that gives me comfort is knowing I could then guilt-free pirate what I’ve paid for, but thats not at ALL optimal, and creates a situation where rightful customers get punished for using what they feel they paid for.

            But like the other guy said, thats why I too only pick up bargains, that way I don’t care so much if Steam disappeared. I also, for any DRM-free game, keep a local copy as a backup (GOG makes that especially easy), partly as insurance, partly because I’m a digital pack rat.

            • sweatshopking
            • 7 years ago

            because you could be guilt free pirating doesn’t mean you are legally pirating. Steam is a service, not ownership. the courts would likely find you in breach regardless.

            • l33t-g4m3r
            • 7 years ago

            No, it’s not. Steam is a digital distributor masquerading as a service. The only “service” that you are receiving is the social networking and cloud stuff, while the games are a good. You’re without a doubt paying for a GOOD when you buy a game from steam, which is a software license, and the only difference is that it is digitally distributed to you. Any game that uses a CD-KEY through steam could theoretically be installed from a retail disk without steam. Steam’s service terminology is nothing more than a giant scam waiting for a lawsuit. The only reason there hasn’t been a lawsuit, is that nobody has felt the need to actually go through with it, not to mention valve recently claimed you don’t have the right to open a class action against them, which is clearly not something they have the right to deny. People have unalienable rights that supersede corrupt corporate EULAs. Steam can’t steal your money because of a EULA, nor can they kill you if you agree to it. They would be tried for murder. This is exactly why valve flipped out about class actions, since people were winning lawsuits in other countries about digitally distributed license ownership.

            • BobbinThreadbare
            • 7 years ago

            Not the EU courts which said Steam does sell you a product.

            • l33t-g4m3r
            • 7 years ago

            True, but SSK doesn’t believe in owning private property, or the rights of the individual.

            • sweatshopking
            • 7 years ago

            no. i don’t believe in [i<] YOUR [/i<] rights. i'm fine with rights for the rest of us. volcanoes.

            • sweatshopking
            • 7 years ago

            correct me if i’m wrong, but didn’t they say they had to be available for resale? seems to not matter to steam. You want to take them to court, go for it. But not everyone will, and not everyone lives in the EU. Steam is a service provider, and until they lose the court battle, it’ll stay that way. I haven’t heard blizzard offer to allow europeans to trade battlenet games. That victory has so far been meaningless. also, i’m not in favor of it, i’d LOVE to trade my games. i’m just saying it’s the reality, and a sucky one at that. though if game trading was implemented, we’d probably see the end of the crazy steam sales. [url<]http://news.softpedia.com/news/Valve-Won-t-Change-Steam-After-EU-Court-Ruling-on-Used-Digital-Games-281240.shtml[/url<]

    • geekl33tgamer
    • 7 years ago

    You guys start evaluating Linux gaming, then file for bankruptcy? It can’t have been that expensive… 😉

      • GatoRat
      • 7 years ago

      Yes, is could have. Running a software development shop for sophisticate products is far more expensive than you may realize. Linux itself may be free, as may be many of the software tools, but everything around it certainly is not. A development team of just ten employees will easily cost $750,000 to $1 million a year in salary, benefits, facilities and support structure. More importantly, that’s $1 million of year which isn’t being spent on something else which actually is profitable. (Failing to respect opportunity cost is one the biggest problems I’ve observed in high tech management, made worse by engineers who are all too often ignorant about the realities of business and who just want to work on the latest, cool, thing.)

        • BobbinThreadbare
        • 7 years ago

        Dude, they announced 2 days ago their intention to look into linux.

    • Ryhadar
    • 7 years ago

    I heard about this last night and purchased Darksiders II for full price on steam. I figured it was the least I could do?

      • lilbuddhaman
      • 7 years ago

      I imagine all that will do is make sure the top level execs get their bonuses and severance packages.

        • Ryhadar
        • 7 years ago

        Probably, but eh, it’s the holidays and I’d rather think less cynically. It’s a helluva time to have your company file for bankruptcy and I was gonna buy the game anyway.

        …I was just originally planning on buying it on sale. 😉

          • lilbuddhaman
          • 7 years ago

          I’ve personally seen it on sale three times in the past few months, let alone the current steam sale that just started.

            • Ryhadar
            • 7 years ago

            Really? I haven’t been planning to buy it that long ago so I guess that’s why I missed it.

            • Ryu Connor
            • 7 years ago

            FWIW you did help. THQ funded Vigil heavily for Darksiders 2. The budget required sales of two million copies. The game is good and sold well, but it has fallen short of those projections.

            I’d like to see a third title from the series and it not languish due to a constrained budget. So thanks!

        • Ringofett
        • 7 years ago

        One of my favorite stories in recent weeks was the opposite tale: The publisher of 50 Shades of Grey handing out Christmas bonuses, thanks to all the worlds horny women. A rare good bit of news out of an industry otherwise in a death spiral. :\

    • lilbuddhaman
    • 7 years ago

    I was looking at a thread about their filing statements, which laid out their estimated expenditures / sales for future projects. There looked to be quite a few titles I hope make it to release, including SR4, CoH2, a new IP, and several more. All the sites I’m trying to research further are blocked where i’m at but a few google searches should find them.

      • Forge
      • 7 years ago

      I was actually waiting for Dawn of War 3. They’ve done some really great stuff with that franchise, and each major release (1,2) has had a very different take on the RTS paradigm.

        • CampinCarl
        • 7 years ago

        While I think a lot of nerds (myself included) would have been interesting in DoW 3, I think that another one of their games was more due for an update: The Homeworld Franchise. In my opinion, the best RTS game ever made. Proper 3-dimensional space RTS, balanced, excellent ability to go for a fast skirmish game or a long, drawn out game. Exciting battles, great unit diversity allowed for interesting tactics…just amazing.

    • MadManOriginal
    • 7 years ago

    As long as Clearlake or another private equity group doesn’t zombify THQ by saddling them with leveraged buyout debt after the bankruptcy reorganization is completed, I think this is a good thing.

      • CppThis
      • 7 years ago

      Depends on whether the new owners want the company to survive or keep on making boneheaded MBA decisions. There’s room for publishers in the future, but it’s as a partner to developers not as the bloated marketing overlord they are now.

    • James296
    • 7 years ago

    as long as EA or Activison doesn’t touch THQ, I’ll be somewhat happy =/

      • The Egg
      • 7 years ago

      Oh god, how could you even say that? Don’t give them any ideas!

      • khands
      • 7 years ago

      It’ll be Nintendo and they’ll end up wii u exclusives.

        • brute
        • 7 years ago

        “wii u prease reconsida bankruptcy?”

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