THQ Reports Massive Loss During 3rd Quarter Financial Results

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There is a reason why THQ is ditching casual gamers in an effort to concentrate on the core market. The mega-publisher lost over $100 million on their venture bringing the uDraw tablet to the Xbox 360 and PS3 consoles. $80 million of that figure comes from uDraw tablets that didn’t sell (1.4 million units are in a warehouse somewhere) while the remaining $20 million loss stems from selling the uDraw tablet at an unexpected lower price. Their casual games division posted a major loss, taking in $25 million less than THQ had been predicting. THQ has stopped all production on the uDraw.

Concentrating on core titles will cause the company to generate less money, however, this will also soften the risk of funneling money into a project that fails to take off. Accordingly, THQ’s CEO Brian Farrell has taken a 50% pay cut with regards to the uDraw failure and the company’s new business model. THQ also laid off 240 employees following the disappointing revenues found in the company’s 3rd-quarter financial reports.

The report was very grim for THQ, but there was one ray of light. The publisher announced that Saints Row: The Third had become the company’s best selling owned-IP, with over 3.8 million units purchased. THQ expects Saints Row: The Third to generate more DLC micro-transactions than any of their previous games. The publisher predicts that the title will sell between 5 and 6 million copies during the course of its life.

It is a long road ahead for THQ. The company dug a well and came up dry with their uDraw investment, forcing the company to exit the casual gaming market. In response to this, the company has had to form a completely new business model, while in the process of downsizing. THQ’s future releases for 2012 include Darksiders 2, South Park: The Game, UFC Undisputed 3, Metro: Last Light, Devil’s Third, and two unannounced titles. The release schedule for 2013 is set to include Homefront 2 and inSANE. THQ is actively looking for a partner to assist with Dark Millenium Online in order to get it out in 2013 as well.