Ross Lincoln is a Deadline contributor.
THQ, a onetime video game industry titan that published franchises like Saints Row, Metro and Homefront, is being sold off piecemeal to industry rivals as part of bankruptcy proceedings. Some of its most valuable titles will be acquired, including gamemaker Ubisoft purchasing THQ Montreal outright and all assets associated with the long-in-development South Park: The Stick Of Truth. THQ had hoped a stalking horse bidder arrangement reached with Clearlake Capital Group in December would allow the company to remain intact. However, CEO Brian Farrell informed staff in a letter this morning that the company was being dissolved, adding that he expected “most employees of the entities included in the sale will be offered employment by the new owners.” THQ suffered several setbacks beginning in 2011 stemming from overexpansion (including attempts to branch out into TV) and flopped games. Most notably, the uDraw Tablet for Wii, Xbox 360 and PlayStation 3 tanked, with more than 1 million units unsold — a failure later cited by the company as a primary reason for a $100 million shortfall. Layoffs, the closure of studios in Australia and Japan and a reverse stock split in July to prevent a NASDAQ delisting failed, and THQ filed for bankruptcy in December.
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You know that things are really bad when a company withdraws its financial guidance, and then abruptly ends a quarterly earnings call after about 12 minutes without taking analysts’ questions. But that’s what just happened with THQ after it disclosed that it needs more cash to remain competitive. That point was underscored by its fiscal Q2 financial report that showed a 23.3% drop in revenues, to $91.8M, vs the period last year (not including deferred net revenues). The video game maker pushed back the release date for its much-anticipated South Park: The Stick Of Truth which was due on March 5, 2013. “We have been working closely with the co-creators of South Park, Matt Stone and Trey Parker, to make sure all of the game’s content performs to the high standards of the TV show, and this takes time,” THQ President Jason Rubin says. The company also delayed Company Of Heroes 2 and Metro: Last Light. THQ says that these changes “will likely create a need for additional capital” and that it has hired Centerview Partners to help it come up with options to handle payments on its $100M in 5% convertible senior notes due August 2014. That usually means the company’s for sale, although THQ says there’s no guarantee that it will come up with anything. THQ attributed some of its fiscal Q2 problems to disappointing sales for Darksiders II which shipped 1.4M units in … Read More »