Q&A: THQ CEO Brian Farrell

Publisher's chief executive discusses MX vs. ATV Alive's DLC-powered approach, uDraw sales, and the state of the gaming industry.

Next spring, THQ will be conducting an experiment. As revealed during June's Electronic Entertainment Expo, the next installment in the publisher's popular off-road racing series, MX vs. ATV Alive, will go on sale at a low price point of just $40. Following its launch, the game will see regular releases of major downloadable content and sales of smaller items to generate further income.

THQ CEO Brian Farrell.

MX vs. ATV Alive's business model is a novel approach, and the man behind it is THQ CEO Brian Farrell. The executive took some time this week to talk with GameSpot about MX vs. ATV and other developments. These include the response to THQ adding a onetime-use code to unlock the online modes of its UFC and WWE games and sales of the recently released uDraw tablet. He also touched on launch plans for the Warhammer 40,000: Dark Millennium Online massively multiplayer role-playing game and how the game industry may rebound in 2011.

GameSpot: Do you see MX vs. ATV Alive as an experiment or the real future of pricing for gaming?

Brian Farrell: Well, it's a bit of an experiment. But what do we know? We know that how people are playing games and the way they're delivered are changing. And so this is a way to deliver a customizable experience for the player in a brand-new pricing model. So it is an experiment. I think it's based on what we've seen in other markets. You see what's going on in Asia and other markets with free-to-play and you do customize your own game, and you really spend how much you want to spend on your gaming experience.

So that's what inspired us for this business model. And it's all about what does the gamer want and how can we deliver a great gaming experience that allows them to customize that experience and also pay for those modes that they want to play.

GS: So MX vs. ATV is going to be a more minimal game initially, with DLC available right away at launch? How exactly is this going to work?

BF: Well, let me clarify that right off the bat. It's going to be an awesome game, right off the bat. It's always been a very big game. So to most users, you won't see any difference between the MX [vs. ATV] game that's in the box and the experience that you've had in our previous MX [vs. ATV] games. But there's a DLC plan. We will be rolling that out to the press what the exact tack of DLC will be and when. But there's a robust lineup of games. In fact, I'm going to the studio tomorrow and going over some of these things.

But the idea is, yes, some DLC within a very short period after launch, with more delivered on a regular basis after that. And, again, it's really up to the player if they want what's in that additional DLC pack, they can buy it. And if they're delighted with the great game experience we're delivering, that's fine, too.

MX vs. ATV Alive will rely on DLC packs and microtransactions to increase profits.

GS: Take-Two CEO Strauss Zelnick said that one way to keep people from buying used games was a robust lineup of DLC. Is that a factor in your DLC-centric approach for MX vs. ATV?

BF: Well, the big win in the games business is keeping the gamer engaged with your experience. And whether that's for a long gameplay experience, a lot of different replay value, or DLC, online play--there's a lot of different ways. But a huge win in the way we think about this business is keep the gamer engaged with your experience, and that was the big impetus behind doing this.

GS: Now, I know it's a small percentage of the entire gaming market, but are you going to be offering disc-based DLC for those people who don't have an Internet connection?

BF: We don't want to rule that out. There is potential for us to wrap up the DLC as some people have done in the past and put it in a package at some point. But, as you know, most active gamers do have an Internet connection. Most of the 360s and PlayStation 3s are connected now. And that's the fundamental base of our users.

GS: Now, if you see this experiment as successful, this model, can you see this being applied down the line to other franchises?

BF: This experience lends itself--because it is such a big game you can download different tracks, riders, bikes, vehicles, game modes like we've done in the past. There's so many different things we could put in DLC. And this kind of experience lends itself, from that perspective, but also we know that the MX [vs. ATV] brand is a very mass-market brand.

So making the initial purchase price of $39.99 very mass-market friendly, it seemed to be a natural fit. We still intend--and, in fact, we want to make sure everybody understands--that the price point for great games for the most part is still going to be $59.99. You know, when we bring out Homefront in March, it's going to be a $59.99 game. [Warhammer 40,000:] Space Marine next spring or summer, $59.99. Saints Row [3], $59.99.

So it depends on the experience. And this is all about the user experience and making sure that if we can deliver a great experience, make it a little bit more variable and customizable for the player, and yet a sound business model for us, we think that's a win for the gamer and a win for the company.

Farrell says the onetime multiplayer codes are necessary for publishers to participate in the used-game market.

GS: Now, let's shift gears to WWE vs. Smackdown 2011. That game shipped with a onetime code to access the multiplayer mode, just like UFC 2010 Undisputed. Buyers of used copies of the game have to pay $10 for a code of their own. Have you been seeing a lot of people buying up that online pass for WWE and UFC?

BF: Yes, and even speaking with some of my peers, it's very important for game companies now. We need to participate in the used-game business. We want to make sure that the ecosystem works between developer, publisher, retailer, and gamer. There's got to be an ecosystem that works for everybody.

So if we can find a way to participate in that through second-user access or something like that, we're not trying to stop used games or punish used gamers. It's actually the opposite. We want to make sure that we participate in the value chain because we are the ones spending tens of millions of dollars investing in these great products. And that's important to our business model. So it's more about getting the participation and the ecosystem right.

GS: Right. But have you seen a large response after UFC and WWE went on sale?

BF: It's a good question. We know that there is a good response. We are getting a number of people signing up. We just don't know how many who have bought used are not signing up. So it's hard to answer the question terribly specifically, if you understand what I'm saying. We have a good response because it is such a great online mode that a used gamer--we've given them a reason to pay the $10 to participate in that. But we just don't know how many used gamers aren't signing up.

GS: Now, let's look at a more macro question. The verdict isn't quite in yet, but it looks like 2010 is going to be below 2009 in terms of the US game industry sales, and 2009 was pretty bad compared to 2008. So do you think the industry is going to rebound in 2011?

BF: Well, I'm a big fan of NPD, and we're not declaring war on them, but what we've been trying to clarify is people are looking at just NPD now, right? And back to our earlier discussion about MX vs. ATV, none of that DLC revenue is going to be captured in any service we know now that would be reported as part of the games industry. You know, hopefully tens of millions of dollars will come from just that single product.

Much of THQ's profits will be coming from digital downloads, which aren't measured in NPD's reports.

So let's look at what NPD doesn't do now--no DLC revenues, no MMO subscription revenues, doesn't track iPad/iPhone revenues. And so, again, I'm not being critical of them, but it's just a lot of investors or people who look at the industry and see the NPD box product sales are down. Where our point of view is more people are playing games than ever before. And we as an industry need to come up with a different way to look at the industry to capture all those revenue streams. Our Steam business is going through the roof, but that's again not reported as part of NPD. So I think the industry is a lot healthier than just what NPD is reporting.

And then, to answer your question specifically when we look into next year, we're really pleased with what's going on with PS3 and 360 hardware sales. We heard some good news over the weekend, too, about Wii sales as well. And all that hardware is going to buy new software. So we think with these emerging businesses, all the online and the unreported things, that plus people buying software for the game machines that they're buying now, we think 2011 should be a stronger year for the industry. And I think with our lineup, I think it's going to be a particularly good one for us.

GS: Going back to your 2010 lineup, you guys recently released the uDraw Tablet. How has the initial reaction to that been so far?

BF: We've been very pleased with the uDraw. You know, we originally went out and said we thought we could do 1 million units in our fiscal year, which ends in March. Based on the initial demand from retail, we said we were going to try and increase that to between 1,250,000, maybe 1,300,000. So really the issue we're going to have there is keeping them in supply over the holiday season. And so we think we've got a winner on our hands. It goes to show you, if you bring a new experience to players, there's a real opportunity.

THQ expects to sell as many as 1.3 million uDraws by the end of its fiscal year.

GS: But you don't have any hard sales numbers right now?

BF: Nothing that I can share with you, not at this time.

GS: All right. Let's move to another question. How is the Red Faction SyFy miniseries proceeding? How involved is THQ with that?

BF: Well, again, we have creative control over the brand. But that's almost not important. And what I like about our partner in SyFy is it's a collaboration as much as a contractual partnership. So they're responsible for all the production of the series. But we have several writers on staff here that are working with them. They're doing the original miniseries pilot in conjunction with our game. But our writers have been involved with their writers. You know, we have complete control or yea or nay to make sure it is consistent with our brand. But it looks like they're going to deliver on the promise. And, again, it's been a great collaboration so far.

GS: Now, I know TV schedules are pretty fixed. But sometimes games get delayed just for quality control purposes. They're not really tied to a season like television is. So does that scheduling complicate things when you want to release a game in conjunction with a TV pilot?

BF: Yeah, you want to be in close proximity. But, again, you probably know the Red Faction brand has been around. I'm looking up at my wall here. I think the original one was in 2001. So it will be 10 years. In fact, it'll be almost exactly 10 years when this one launches. So there is brand awareness. The purpose of the SyFy relationship and the transmedia drive that we have is just to build more awareness on the brand. If it's around exactly the same time, that would be the best.

The Red Faction SyFy series is coming along.

But, really, because there's already a lot of awareness around the Red Faction brand, anything in close proximity works for us, particularly if we build that brand over time. So our current thinking is we've had a very robust team working on it. You know the team that's been working on it there, they're the pros from Dover within THQ here as well. So I think we're going to be on date pretty much with the launch of [the] SyFy series.

GS: All right. Now is Saints Row: Drive By going to make the 3DS launch?

BF: We haven't set about a launch just because we're not sure exactly at all about the quality of the product. So we'll keep you posted on that one. But to us, I mean, it's always great making launch. I like making the launch of a new hardware system. But we've got too strong a brand in the Saints Row brand to ship anything but a great experience.

GS: Now, I know you guys were a little disappointed in the sales of UFC 2010, and now the next one's not coming out until next fall, it looks like. So it's almost an 18-month space between installments. Is that going to be standard for the UFC series? Is it going to be 18 months between installments?

BF: Let's see how the 18-month system works. You know, it's a great brand, as you know, it's a fantastic brand. But unlike NBA or NFL, the rosters don't change all that much. So we think giving at least 18 months--I think it's going to be even closer to 20 or 21 months--between the last one and the next game, we think that gives the consumer more time to enjoy the experience that we gave with 2010 and make sure we give them a great experience for the next one. So, yeah, I think giving it 18 to 24 months is probably about right. But let's see what happens with the next launch.

GS: How is the massively multiplayer project Warhammer 40,000: Dark Millennium Online shaping up?

Warhammer 40,000: Dark Millennium Online's release plans remain in the dark.

BF: We've not picked a firm launch date yet. As you know, those are the most complex games and gaming systems on the planet. And we know what the competition is. So we know we need to do it absolutely right. So it's still a couple of years out. But, I mean, even the early version--in fact, I've got a review of that product at 3:00 and then I'm actually going to be down at that office and studio on Friday looking at the progress there. We're really excited about the game, but when we know we have--well, first of all, a firm beta date, obviously we'll announce that. But it's still a couple of years out because we want this to be a real defining experience for the MMO player.

GS: Now this is THQ's first major MMORPG. What's kind of the biggest challenge you guys are facing? I mean, you've got a well-known IP out there, but it's also a very competitive space. If you launch a couple of years out, you'll have both World of Warcraft and Star Wars: The Old Republic to contend with. How will Warhammer 40,000 differentiate itself?

BF: Well, first, it's such a great universe. I mean, we have shipped over 5 million copies of Warhammer 40K PC games. We'll have those players play the online experience. It's not an MMO, obviously, but we know there's a dedicated fan base. We've delivered them great games, and we believe that if we deliver a quality MMO experience, we can convert those PC box product game users into MMO subscribers.

But you've got to deliver a differentiated experience that still feels familiar to an MMO player. That's what we intend to do with Warhammer 40K. So make some of the systems familiar so it's not foreign to a player how to continue to level up, but make it a really unique experience based on that IP. And that's the vision for the product, and I think the team down at Vigil is executing on that vision, from what I can see.

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Discussion

49 comments
106473
106473

you wont get me to pay for 40k!

anthonycg
anthonycg

@ KrazzyDJ But it doesn't come out in months - it comes out in the same week or even before the games are released. Some games properly create new DLC but most of it is just removed in-game content there to cheat the gullible public.

Crush_Project
Crush_Project

ya i used to love thq and most of teh products they have, but at this point, the love is long gone.

gob__bluth
gob__bluth

In no other entertainment industry do the fans get so outraged at the entertainers' attempts to make money for their efforts.

styymy
styymy

Are there that many people playing WWE and UFC? They should have asked him about Homeworld 3. Where is it?

wastinnaziscum
wastinnaziscum

luv warhammer 40K sh*t but i'd never b a monthly subscriber to a pay to play MMORPG

blueace88
blueace88

Great interview, but I was curious to hear a developer's thoughts on kinect/move, which appears to have been left out

SadPSPAddict
SadPSPAddict

Very insightful. Some good questions and intelligent answers. Particularly interested in the fact that DLC isn't being included in NPD figures!

drangel_jam
drangel_jam

Great interview. Great insight. Can't wait for these next THQ games: Homefront, Red Faction, and that Itagaki game.

travisstaggs
travisstaggs

I'm not a big fan of THQ, but Red Faction looks pretty cool.

IceJester45
IceJester45

I have plenty of fond memories of the original ATV Off-Road Fury on the PlayStation 2. That game was one of the first really good games for the system. I'd love to see the series reinvigorated, and I'd be willing to give a new installment a try at only $40.

KrazzyDJ
KrazzyDJ

One thing which DLCs do well is keep the game in circulation for a longer period of time. I mean, when a DLC for a game comes out in a few months, you definitely see coverage of it all over, thereby increasing awareness about the game !!!

Roidz87
Roidz87

In all reality, based on the money we spend on games, it is one of the cheaper hobbies out there. If you spend $60 initially and that game has great continued online support and multiplayer, then that game paid for itself and then some because you have not only purchased an initial experience but also a continued experience for years to come.

Roidz87
Roidz87

This is not a bad idea, it could have some very positive qualities. However, it could lead to us, as gamers, getting screwed over in the end. I mean, we have already seen the hidden DLC already being pre-loaded into discs, which means that most DLC is a cop-out and was already finalized for release. I do agree with the idea in that these companies need to make a profit as well. The cost to write, code, and produce a game is rising as AAA titles cost hundreds of millions to make. Therefore, like any other business, in order to support continued growth and to continue making games that we as gamers love, these companies need to make profit on their IPs. It's not rocket science.

malikmmm
malikmmm

"Our Steam business is going through the roof" wow! way to go pc Gaming!

jimmy1398
jimmy1398

@OmenIWF That's sort of the point. Developers and publishers hate the current second hand market because it reduces their sales. When someone buys a second hand game, all of that money is kept by the retailer, none of it goes back into the games industry. That's why most developers/publishers are trying to entice people to buy games new or are looking at ways to get into the second hand market themselves. Honestly, there really isn't enough information in this interview for me to decide if this is a good or bad idea. It's really a question of just how much of the game is going to be held back for future DLC. If you're paying $40 for a game that is missing a certain amount of content and then paying $20 for that missing content in the form of DLC, then there really isn't any difference with the way things are now. However if you're paying $40+$20 and ending up with less content than you would have gotten if the game was just $60, then obviously there is a problem.

CeZar_87
CeZar_87

What a freaking tard.. I hope THQ fails horribly. They have been producing nothing, but garbage for the past near 7 years.

roams
roams

No words on their plans to make WAR40K:DMO another "Order vs Chaos" game with only 2 sides... I wish they'd just announce that their gonna kick that idea and go with multiple armies instead of 2 factions.

Sparticus_GT
Sparticus_GT

Wow this is a bad move for THQ. greed, greed, greed. Gaming is already expensive enough. They certainly are not doing this to get less money from us..

OmenIWF
OmenIWF

He's lost touch with reality, forcing gamers to pay £10 or $10 just to play online after buying a second hand game will, more than likely, eventually kill the trade in second hand games should others start doing this.

NColdhardt
NColdhardt

His picture slightly reminds me of this used car salesman I had once met. Yeah. I don't trust him. LOGIC'D.

thisranks
thisranks

In the long run i would much rather have my content on a physical disk then in DLC form. There's no guarantee that if anything happens to THQ that i might still be able to download it at a later date, and that is troubling. There is no 100% guarantees, and that is mostly what scares me away from DLC.

GeneralShowzer
GeneralShowzer

@stakex007 You didn't catch my sarcasm? He says their steam business is going trough the roof...

M-S-M-S
M-S-M-S

I have a lot of respect for THQ. They take a lot of risks, published quite a lot of amazing titles, and it seems they do listen to the gaming community, One example is Metro 2033. For me, it was a risky game, that turned out to be a mega seller on the PC.

d12malu
d12malu

I feel a little bit better about my small stock investments in THQI from reading this. Hopefully they can deliver with the innovative products and business models the CEO talks about. UDraw looks like a winner and Warhammer 40k MMO could possibly make this company Blizzard like.

freedomspopular
freedomspopular

Sounds interesting. Although, if anything, I'd prefer to see a slightly higher initial price (maybe $70 or so) but get all the DLC for free. Or even better, just release completed games with no need for DLC.

fzd88
fzd88

"You see what's going on in Asia and other markets with free-to-play and you do customize your own game, and you really spend how much you want to spend on your gaming experience. " The ONE word that you should read more carefully in that quote is the word FREE. The whole point is to offer the game for FREE, and then players pay micro-transactions for the stuff they want. The point is NOT to charge 40$, and then charge more for the DLCs. Make the game FREE, and charge for DLCs. Man, if you are gonna emulate another business model, at least do your homework.

DennisWZH
DennisWZH

basically, selling games at cheaper price so you can milk them with DLCs later on.... amazing!!

Emac44
Emac44

Why are they interviewing ThQ their games on average suck and will only get worse each year.

theJBlounge
theJBlounge

Is part of the interview missing? I don't see Kinect/Move or a real conclusion? I also don't think $40 fits in the same model as the free-to-play system. I think $20 would be a more reasonable price to get an impulse purchase.

stakex007
stakex007

@GeneralShowzer - Tell that to the more then 1 million people who bought Call of Duty Black Ops for the PC. Sure the PC might make up a smaller portion of the sales then any other system... but dead? Hardly. Oh, and what was the last big MMO on a console? Oh yeah, there isn't one. One of the biggest game markets has ALMOST no foot prints in the console world and is dominated by the PC. Again, PC gaming dead? Hardly.

DisturbedClown
DisturbedClown

That sounds horrible. If this catches on, companies will abuse it and charge a lot for small things. Sure, you may pay less for a game if you don't like it, but if you say, resell it, you don't get any money back from you buying DLC. Sure, they don't care. I personally do, and I'm rather fond of renting games.

GeneralShowzer
GeneralShowzer

Our Steam business is going through the roof, but that's again, not reported as part of NPD. So I think the industry is a lot healthier than just what NPD is reporting. PC gaming is dead.

Rebornpheonix
Rebornpheonix

Wow, THQ.. I had forgotten that the company existed even though I've been following Red Faction. They really need to put out better games, this ATV.. Wrestling.. Motorcross stuff just isn't going to do it for the company.

Stressthesky
Stressthesky

I don't mind the lowered price, charging for extra dlc. Let's say I don't really like the game, then I've paid less for it and it doesn't feel like a bad purchase. Of course, I'm pretty sure if I like the game, the extra dlc is going to push it way over 60$ for the extra dlc.

Ronnie_Rim
Ronnie_Rim

THQ should stay away from those crappy wrestling and motorsport games and put their resources into Company of Heroes and Dawn of War.

godzillavskong
godzillavskong

I don't know about this minimal cost for a game, which may be a stripped down version, then charging for DLC installments. It seems like more and more companies are releasing games, with the bare minimum on them, then charging for DLC at release that could've fit on the disc. I'm all for the one time code for buying new games, and having to enter it to unlock the online. I understand that approach. I remember buying Lost Planet 2 and there was DLC available immediately after launch! A game like that could've used as much content as it could to help sales. I also remember paying for Dead Rising Case Zero and feeling like I got duped into paying for a demo. It was that short!

darkfox101
darkfox101

Q: why did you let COH fall into the dumps?

DBZKING1234
DBZKING1234

You expect to sell 1.3 million udraws? Umm... good luck with that!

jammitin
jammitin

These online passes are so shady. He can claim that they are not punishing the gamer all they won't, but if they would hammer out something with Gamestop instead of locking the online away then they would get their share of the pie.

Malscyllis
Malscyllis

Can't wait for the warhammer 40K MMO!! Sick of fantasy MMO's. Old Republic and WAR 40K here i come!