THQ earnings drop 11.8%, Company of Heroes Online canceled

Publisher posts $14.9 million loss for holiday quarter; WWE SmackDown vs. Raw 2011 ships 2.7 million units; uDraw ships 1.2 million; WWE Online also canned; UFC Trainer delayed; stock sinks.

One day after Electronic Arts posted its earnings for the holiday quarter, THQ followed suit. The publisher had a rough quarter, with earnings falling 11.8% from $356.7 million to $314.6 million. The company reported a net quarterly loss of $14.9 million, down from $542,000 in profit it posted during the same period in 2009.

WWE SmackDown vs. Raw 2011 shipped 2.7 million units during the holiday quarter.

The loss was in part due to a $30.3 million charge the company incurred because of lowered expectations on its kids' film licenses. It also took a $9.9 million hit due to the "cancellation" of two free-to-play online properties--Company of Heroes Online and WWE SmackDown vs. Raw Online. Both games were apparently canned after "the company reevaluated its strategy of adapting certain Western content for free-to-play online games in Asian markets."

However, the Western open beta for Company of Heroes Online will remain online until March 31, when THQ will then "evaluate the next steps for the Company of Heroes series." [UPDATE] THQ has now confirmed that, along with WWE Online, the game "has been cancelled altogether."

Without the aforementioned expenses and other onetime charges, THQ would have made a quarterly profit of $28.5 million on $323.1 million in revenue. Its two biggest-earning titles during the quarter were WWE SmackDown vs. Raw 2011, which shipped 2.7 million units, and the uDraw art tablet for the Wii, which shipped 1.2 million units in North America alone. THQ plans to release the peripheral internationally during the current quarter.

Turning to the current quarter, the company lowered sales estimates to $245 million-$260 million. One reason for the adjustment was the delay of the motion-sensing exercise game UFC Personal Trainer to the company's next fiscal year, which starts on April 1.

The market's reaction to THQ's earnings report was swift and sharp. In after-hours trading, the company's share price had sunk 12.64 percent, or $0.81, to $5.60 as of press time.

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81 comments
amar1234
amar1234

ladiesman you have no c lue.......... Strategy games dont use the same engine as Japanease rpgs lol, you cantexpect them to look the same  . For its genre company of heroes had great graphics, its was cutting edge stuff, I just think you have no clue about the gaming world at large beyond your anime style games.

haRT3r
haRT3r

Company of Heroes has horrible graphics? You gotta be kidding me!

Chainer323
Chainer323

it's not always about the graphics

Ladiesman17
Ladiesman17

THQ is great publisher!! They just need great engine to support their line of title(s)!! I noticed they sucks on this area!! ;) Company Of Heroes, Warhammer series, Red Faction, Darksiders had horrible graphic & horrible trailers :roll: although the game-play is quite great. :) but compared with their competitors like 2K, Valve, Capcom, EA, ActivisionBlizzard, Square Enix & SCEA. those companies I mentioned already push their limits, especially on graphic engine.

Chainer323
Chainer323

thank god they canned the WWE Online game; i could have seen that game dying off in the months of it's release, had they continued on with development

Megavideogamer
Megavideogamer

Canning the WWE on-line game was the smart thing to do. There is no way that could ever have worked out. WWE = a must can.

pelvist
pelvist

COHO was actually very good, i havent heard one preson say anything bad about it. I would have thought COHO would have been a sure fire success tbh.

The_Gaming_Baby
The_Gaming_Baby

Smackdown has sucked for years and UFC 2010 had a broken submission system

Cantido
Cantido

THQ has Double Fine with them now. They should reconsider moving their downloadables to PC. Also, if they needs more RTS games, Brutal Legend and Dawn of War 2 have a lot more in common than the hatedom care to admit. They should consider having the guts to make the sequel that EA axed and putting it on PC. Brutal Legend's multiplayer is basically "Sacrifice 2," so the PC players will go ga-ga for that.

moe3000
moe3000

they should jus do distribution of games were the ip stays with the developer instead of ownin the ip and the developing company

Gooper_Blooper
Gooper_Blooper

This is why I don't play games that rely entirely on online play. Not only do you never know if it'll just die on you, but if you ever want to return and play it again in the future, it's likely you won't be able to, because nobody else is online or the servers were shut off.

s8man888
s8man888

So will COHO be closing down in all regions? Like China too? I guess we should of seen the closing of their f2p games coming, when THQ stopped being the publisher of Dragonica Online in NA.

maximus_2
maximus_2

Ha! they just banned my account on coho forum and ingame.. lol what a mature move..

duderdave
duderdave

Anyone who knows anything about business and finance knows that THQ had sufficient knowledge several months prior to this earnings report that the money side of their business was not going so well and that scalebacks were inevitable. Knowing this, THQ, just like any other business, had to have a "short list" of what ventures would be cut, and in what order and scale, if only based on current and projected P&L sheets and available cash flow for financing activities. Knowing this, it is inexcusable that THQ allowed the COHO project to sell COHO in-game products for real money given that the project was already under consideration "for the axe". By doing this, they irresponsibly changed the terms of agreement from "paying customer/players" to "venture capitalism". In most parts of the world, this is called a "scam". Had they not encouraged players to spend real money for THQ/Relic COHO cash to buy permanent game items for a game they assured everyone would remain stable and not go away, players might be sad or hurt, but not angry or feeling truly cheated and scammed. Knowing that investors are not deaf or blind when a company tries to dupe them or its customers, it is no surprise that their stock took such a hit. If the rumoured lawsuit comes about, I think we can rest assured it will take an even bigger hit. The damage a gaming company does to itself by scamming its customers in such a way is in no way worth the money and trust they lose because of it.

duderdave
duderdave

The way they operated their coho beta is scandalous and should be held up by the industry as an example of how NOT to run a beta. There are even rumours of a lawsuit in the works because of what they did and the way they did it. THQ is ending the Company of Heroes Online project, program, game, and its players at the end of March 2011. COHO will no longer exist after that. All players will lose all of their commanders, heroes, and army items, regardless of whether they were purchased with real money or earned through game play. This represents a substantial loss of time and cash for many players because THQ/Relic had clearly stated that nothing would be wiped and it was therefore ok to invest time leveling commanders and purchasing THQ/Relic's COHO cash. They are going back on their promise and commitment. The problem here is that many players purchased permanent in-game heroes, items, and buffs with real money with the guarantee that they would be permanent. Now, regardless of how much money was spent, they are basically telling those players, "You lose it all and will shortly have absolutely nothing to show for your purchase/investment."

maximus_2
maximus_2

damnit COHo was such great fun game to play!!! they really screw alot of people over by canceling it..

Alex_09
Alex_09

They make great RTS and Action Adventure games, they just don't know when something is a terrible idea. For example the new Red Faction that's being releaed.

FlaMezV2
FlaMezV2

That's cause they are AWFUL!

jack00
jack00

THQ - "Quick, we only made 245 millions dollars instead of 260, let's cut 40% of our staff to make up for the lost money!"

kristaps194
kristaps194

Ha ha! They laughed at me when I bought CoH Gold Box on Steam for only ~4 $. Look who's laughing now :D

Toysoldier34
Toysoldier34

@bandtnt Don't we all. They ruin the industry and the market and give nothing back.

Kan0nF0dder
Kan0nF0dder

RTS games - CoH/DoW/SupCom are what they do best. But they make the most money from uDraw on the Wii? LOL, that's just sad.

SauhlGood
SauhlGood

spread to thin, THQ needs to focus on its core franchises, not try n push into the f2p market. All these franchises getting mmo versions, because all the top executives of these companies are horny for activision/blizzard profits, and most of these companies dont own IP's worth turning into a mmo, nor the development teams skilled enough to envision such, or the cash/time to invest into a 4+ year development cycle. But they all expect to be rolling in $ like blizzard/activision... their all run by cold callous, bottom line focusd executives. Gamers are no longer making our games, big corporations and suits are... cheap games attract short term cheap players, experiencing cheap thrills, then moving on... there is no lasting value there. also F2P games will always be synonymous with the "dollar store" to me... you dont have alot of money but you want to have a lil bit of fun and maybe get lead poisoning in the process due to some cheap foreign made product. CoHo was a decent game, but lacking even what its retail versions had... more maps, more armies... their lead designer having died in a tragic car accident im sure set things back for everyone there. r.i.p.

loopy_101
loopy_101

Stop making crappy WWE games each year. Problem solved.

GabrielOnuris
GabrielOnuris

@M-S-M-S Yeah, THQ has made a lot of good things for us PC players; when they published darksiders for pc I was excited, and got even more delighted about THQ itself. I have a lot of its games, with proud, and they can count with my little money to get even better, because yes, they do bet right.

bandtnt
bandtnt

I wish that happens to COD Black Ops

Nodashi
Nodashi

@TheColdBlooded EA was very sucessful, then they started publishing a LOT of games - then they entered a period of several years of financial losses, and finally realized they must publish less, more polished games.

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

@GabrielOnuris I agree. Just take a look at the games they published: Company of Heroes, Darksiders, Metro 2033, STALKER, Supreme commander, WarHammer 40K, etc. You can see that they take risks, and in most cases, they bet right. Hope they'll do better in the future, because they deserve it.

warhawk-geeby
warhawk-geeby

I don't generally buy THQ games I've just realised.. Obviously there's a certain 'feel' to their games. Kick it up a gear THQ an I'm in.

TheColdBlooded
TheColdBlooded

@Nodashi What? EA is/used to be very successful , there's no comparison between EA and THQ.

Stonecutters908
Stonecutters908

They need to get their butts in gear and give us Saints Row 3.

GabrielOnuris
GabrielOnuris

That'a a pity indeed; THQ is my favorite game publisher, I hope these bad news doesn't happen again and make great harm to the company.

Player__
Player__

It's little sad how companies support projects without good focus. It might not reflect well on the developers to cancel games. Especially when the game is already in public beta state.

MERGATROYDER
MERGATROYDER

They have better titles shipping this year that should bring them back. Sucks they couldn't keep CoH going though.

Arkanis_Vayll
Arkanis_Vayll

@Supertrooper23 I agree. And please, for the love of all that's holy, forget everything you did with DoW2. There's no reason for that license to be a scaled-down and half-baked ripoff of CoH when DoW1 was such a stunning, full featured traditional RTS. With Homeworld to cover 3-Dimensional space, DoW for the purists and micro-managers, and CoH for the squad-based tactical crowd, they could have a stable of the best RTS games on the market, all with a unique focus. And they should.

sleepychicken
sleepychicken

Saints Row and Red Faction this coming year. They'll be fine.

Jawehawk-DK
Jawehawk-DK

YES!!!!!! screw COH O, and get back to balancing the original CoH game. FINALLY! And no need for a second CoH game, seeing as that would just split the community. It's hard enough to get a game going as is.

Koi-Neon-X
Koi-Neon-X

I don't like hearing THQ not doing well (or any other company for that matter). I'm hoping the "Smackdown vs Raw" series get a major overhaul (there is a reason I haven't bought one in a long time). I'm hoping their fortunes improve though!

supertrooper23
supertrooper23

their main focus should be on 3 rts games - homeworld 3 - dawn of war 3 - company of heroes 2. fvcking do it!

gamingfrendly
gamingfrendly

i played all company of heroes games and the free to play version had some great things the others didnt but oh well lets see whats there planing, also THQ earnings are really poor compred to the sales of call of duty alone they need to move fast.

monson21502
monson21502

to steal a line from liar liar. *START MAKING BETTER GAMES A HOLES!* i think jim carey said stop drinking a hole . but making bad games all the time is worse then drinking:P

daabulls23
daabulls23

Kind of glad COH: Online was canceled. I was worried they would "dumb it down" too much, but I'm glad they are at least thinking about making some more.

Lum_Yatsura
Lum_Yatsura

Oh bother. PC gamers who are wrestling fans, let down again... =(

marinesneverun
marinesneverun

THQ makes great games but they don't know how to market them!!! ALMOST ALL THEIR GAMES I HAVE PLAYED BY HAPPENCHANCE! But, they make the best games like COHO and Supreme Commander Forged Alliance!!! What the @#! THQ FIRE YOUR MARKETERS! Your Devs Rock!

goodemon
goodemon

This is pretty bad for THQ. I Hope Red Faction Armageddon does really well for THQ's sake. I hope there is a demo soon so i can decide whether I will buy it or not.

Masenkoe
Masenkoe

I dont even remember the last good game I played by THQ other than DoW2. The Homefront multiplayer footage hasn't impressed me yet but I'm waiting for reviews as I do with 99% of all games... you just never can be sure with what you're getting .

Nodashi
Nodashi

THQ is learning the hard way the same EAgame learned the hard way some years ago. Publishing a lot of "so-so" games won't work in a market with so many A+ titles. They gotta invest in fewer, great games. I think the warhammer 40k DoW 2 series is one of the few good titles they have been shipping in recent years. Focus folks, focus.

acidbite
acidbite

Yeah I already deleted my post, I was wrong. CoHO homepage didnt clarify clearly enough, that it actually gets closed. Shame none-the-less. One of the best online RTS games out there besides SC2.

ziproy
ziproy

Good, maybe we'll actually get an actual sequel to CoH instead of this online thing they were considering. THQ has my favorite fanchises, stop making these wrestling games and start making good games