by Joseph Christ on Jan. 17, 2012
Over the weekend we reported on rumors that THQ was in the process of cancelling their entire 2014 lineup in preparation for a company sale. You see it all started when industry insider Kevin Dent, actually the head of the IGDA Mobile Special Interest Group, started tweeting about the dire financial circumstances that THQ was currently facing. Stating that the company had cancelled its Warhammer Online project and was also in the process of returning all attained licenses to the licensors. The speculation was that THQ was in the process of preserving as much cash as necessary in their coffers for a possible company sale.
Now Dent did clarify those tweets later stating, "For clarification, I think THQ shuttering is a long shot to say the least, they will either take financing or do a pipe. Money is cheap now." But that doesn't necessarily get THQ off the proverbial hook. When we reported on the story we added quotes from industry analyst Michael Pachter who spoke to Gamasutra in early December about THQ's financial troubles, going so far as to state that the company may even run out of mony by the June 2012 quarter.
“Given its declining licensed and core properties (apart from Saints Row), and an uncertain release schedule next year, we remain unconvinced that FY:13 will be profitable,” said Pachter.
“We think its cash position may be compromised. The company’s debt covenants suggest to us that its line of credit must be repaid to avoid default, and we think that THQ is at risk of running out of cash by the June 2012 quarter.” (Emphasis mine)
It's all quite the bristling charge for a company having financial troubles and that may be trying to keep investors from getting too jittery. In response, THQ has released the following statement denying the rumors of the 2014 cancellation, and sale of the company.
"THQ has not cancelled its 2014 line-up, and has not made any decisions regarding the planned MMO," the statement reads. "As part of the ongoing review of our business, we have made decisions to ensure that the company is strategically addressing the most attractive markets. As we have previously announced, we have dramatically reduced our commitment to the kids' boxed games sector which leads to a significantly more focused release schedule moving forward. Our slate for calendar 2012 and beyond is focused on high-quality core games and continues to build our digital platform and business. We are excited for our pipeline of original and high-quality content along with our relationships with some of the best talent in the industry."
THQ also states that they have no made any final decisions on Dark Millennium Online, but seeing as the MMO landscape is exceedingly volatile for new games, and the fact that GamesIndustry.biz is reporting that the game is "currently being offered for sale to other companies", I would think that it's probably a safe bet that we won't be seeing Dark Millennium Online as a THQ product any time soon. Add into this THQ's recent cancellation of the entire Red Faction franchise and a slew of recent layoffs from numerous departments, and the entire thing paints a fairly dark picture for the company.
Even taking THQ's statement into account, it's hard to not come to the conclusion that THQ is a company in trouble. A company, at the very least, looking to shed unnecessary resources in the hope of adding buoyancy to their bottom line and, at most, looking to sell itself altogether.