THQ Being Sued by Adidas for Breach of Contract

THQAccording to The Oregonian,  sportswear company Adidas has filed a lawsuit against THQ for breach of contract last Wednesday in the Multnomah County Circuit Court. The breach stems from the fact that THQ and Adidas signed a deal in December 2010 that a product would be released by January 2012.

 

The product in question is a piece of interactive gaming software, tentatively entitled “MiCoach 24/7,” based on Adidas’s MiCoach, a motion-tracking device intended to be used to measure exercise and as a coaching tool.

MiCoach serves as Adidas’s response to compete with Nike’s Nike+ and Garmin sport watches. Adidas is seeking damages of $10.6 million as well as an injunction against the publisher from selling the rights to a MiCoach-related title.

The lawsuit states that in December, THQ told Adidas that they would be unable to complete the product due to a series of recent layoffs that hit the company after their poor financial performance. Among the employees who were laid off were many of those who were developing the title.

THQ has also been accused of refusing to pass on the project to a different developer of Adidas’s choosing, despite the company’s inability to actually complete the title.

THQ has declined to comment on the lawsuit.


Analysis: It’s no secret that THQ has run into a slew of problems lately with profits plummeting, mostly thanks to the poor performance of the uDraw peripheral for Xbox 360 and PS3. It has reached a point where they face a possible delisting by NASDAQ if they don’t boost their stock price to the minimum of $1 over the next six months. Unfortunately, their stock is currently sitting at ¢50 at the time of writing.

THQ can’t seem to catch a break lately, and this bit of bad news certainly doesn’t help anything. It’s clear that Adidas isn’t interested in any excuses THQ may have and is only concerned about obtaining the product they signed the agreement for, an understandable reaction by the company, and I don’t see how THQ couldn’t have seen this coming. The weird part to me is why they didn’t just allow Adidas to move the project to another studio. Sure, I’m certain a fair amount of money had been lost due to the title’s development, but it’s not like THQ would’ve been able to release the title when development was finally completed.

However, I for one hope THQ can find a way to pull themselves out of this mess. On a previous rendition of The Monday ‘Joe, I touched on this topic. At least to me, THQ is a company that publishes new, interesting titles of a consistently high quality. They haven’t followed suit with the abuse of needless online passes, a practice that’s becoming rare in today’s industry. Most importantly is that their biggest mistake, that being the development of the uDraw tablet, is incredibly poor luck, considering it’s a product that is interesting and could’ve been successful if it had the right software with it.

Hearing news that people are losing their jobs and a company I genuinely like tanking is never something I enjoy hearing, let alone write about. Here’s hoping the recent financial troubles don’t affect the development of Darksiders 2 or any other upcoming title from the company.

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Nathan Wood

About Nathan Wood

When he picked up a controller on that fateful day at the age of 6, Nathan had no idea how quickly it would captivate him. Enjoying a wide range of games, he is up for anything as long as it is of good quality, interesting or laughably bad. When not playing or writing about video games, he enjoys music, film, basketball and art. He is currently completing his last year of his IB diploma before mastering the great land known only as: University.