THQ Suffers Significant Losses in Fiscal 2012 Despite Increased Sales

Yesterday, THQ released their fiscal report for the fourth quarter and full year ending on March 31, 2012. THQ has revealed that, despite an increase in digital and net sales, the company still suffered a greater net loss when compared to last year. For the full fiscal year, total sales rose from $665.3 million in 2011 to $830.8 million while suffering a net loss of $239.9 million, growing from a loss of $136.1 million year-over year.

Digital sales grew significantly for the company, bringing in $18 million in the fourth quarter, a 44% increase over the fourth quarter of 2011. The company also plans to drop all hardware and software development for the uDraw tablet as they attempt to sell all remaining stock over the course of the year. THQ has also recently gone on to state officially that they will not be publishing Devil’s Third as they determined that the “profitability profile of Devil’s Third no longer meets [THQ’s] internal threshold.”

THQ President and CEO Brian Farrell went on to say the following:

“We exceeded our initial fourth quarter guidance for net sales, earnings and cash position, driven by high quality core games with a significant digital component, which is the blueprint for our future… We have made significant changes to our business, and are on track to execute our strategy of delivering quality connected core gaming experiences, beginning with the sequel to the award-winning Darksiders in August.”

Notably, THQ has seen Saints Row: The Third, WWE 12, and UFC Undisputed 3 perform successfully, with Saints Row: The Third shipping 4.25 million units to date, WWE 12 moving 2.2 million units, and UFC Undisputed 3 shipping 1.4 million units.

For 2013, THQ will see the release of the standalone expansion Enter The Dominatrix for Saints Row: The Third, Darksiders 2, Company of Heroes 2, and Metro: Last Light, among others.

Analysis: It can’t be said enough how much financial trouble THQ has found themselves in as of late. Despite increased sales in several departments of the company, losses grew, and it ultimately highlights how big of a flop the uDraw tablet turned out to be. Stopping all production of the device and software for it is for the best, and the fact that most gaming outlet stores still have large reserves of the device certainly doesn’t bode well for the company.

This troubles me because I really do enjoy THQ’s titles and I can’t emphasize this enough. Even looking at their line up for the next year, there are several titles that I’m going to pick up soon after release  more than likely, and I can only hope that the financial trouble the company’s seen doesn’t affect the development of the titles too severely. Whether this turns out to be the case is up in the air, especially after they announced that they wouldn’t be publishing Devil’s Third at all. But by stopping production of the uDraw tablet, streamlining their business practices, and having a strong line up for the year, one could hope that THQ will bounce back over the course of the next twelve months.

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.