THQ Hit with Numerous Problems; Nasdaq Threatens Delisting

THQAccording to GamesIndustry (registration required), “Saints Row publisher THQ has been threatened with delisting from the Nasdaq stock exchange.” The company has until July 23 for the bid price of its stock to rise above $1 per share for a minimum of ten consecutive days. THQ’s stock is currently valued at 70¢ per share and has fallen in four years from a high of $36.

This comes after a slew of other problems, including cutting staff from its publishing and administration teams this past week, shelving games for younger audiences—including a Disney project—and closing three internal development teams in September. The ATV and Red Faction series have been abandoned; and Drive By, a Saints Row spin-off, was canned before even being shown publicly.

In the past two years, the company has closed Big Huge Games and lost staff from Volition and at least five studios. CEO Brian Farrell had said also that the company would focus on fewer titles. THQ has decided to instead focus on its main game franchises as well as “developing its digital initiatives.”

More recently, THQ cut thirty people from its UDraw team and hinted that more cuts were coming due to “organizational shifts.” In a statement to Game Informer, the company confirmed “a reduction in force to the company’s administration and publishing organization.”

THQ will announce its new business model in its third-quarter conference call, which will occur on Thursday, February 2.

Analysis: I think at this point, it’d be a bit of an understatement to say that things aren’t looking good for THQ. They’re cutting people left and right, canning projects, and seem to be doing an awful lot of “reorganization.” What surprises me the most is that Nasdaq is recommending that people hold onto their stocks right now despite a pretty grim forecast. I get that you don’t want to crash a company through speculation, but unless THQ starts releasing some quality products, I don’t see them lasting too much longer.

This isn’t just a recent issue. Over the past two years, they’ve let go of quite a few people and closed down more than five studios. Rumors say that they’re in the process of closing or will be closing more studios soon. These are not the signs of a healthy company. This has been coming for a long time. THQ has had something wrong with their formula for a while and doesn’t seem to have done anything about it. How else does your stock fall 98% over four years?

Maybe there is a glimmer of hope left. Farrell has stated that Saints Row: The Third has shipped 3.8 million units and that THQ is expecting to ship anywhere between 5-6 million units over the game’s lifetime. If THQ is able to capitalize on this title and work off its success, it may be able to come back, albeit slowly. Still, after reading an open letter from an alleged ex-employee to THQ, I have to wonder if perhaps the company’s leadership style is too outdated to survive.


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