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$35 million full-year loss for THQ

Publisher manages to keep string of sales growth years alive, but falls significantly short of original targets.

While the last year was a record-breaking one for the gaming industry as a whole, not everyone came out a winner. In a year-end financial report released today, THQ said it marginally increased total revenues to extend its growth streak to 13 straight years, but the publisher reported more than $35 million in losses for the fiscal 2008 campaign when it expected to turn a profit.

For the 12 months ended March 31, THQ posted sales of $1.03 billion, up a little more than one-third of 1 percent from the previous year. When it began the year, it had expected sales between $1.12 billion and $1.15 billion. It also expected to post a profit between $1.34 and $1.44 per share, but instead reported a loss of $.53 per share, totaling $35.3 million.

For just the fourth quarter of its fiscal 2008, THQ likewise posted greater sales but followed up the previous Q4's profit with a net loss. Revenues were up to $187 million from $172.1 million, but the publisher lost $34.5 million for the three months, whereas last year's fourth quarter saw it bring in a net income of $6.5 million.

The publisher suffered a handful of setbacks in the past year. Installments of Stuntman and Juiced underperformed, convincing the publisher to abandon the franchises. The company also canned a number of projects, including the PlayStation 3 edition of Frontlines, and closed its Concrete Games studio.

"In fiscal 2008, we did not achieve our revenue and profit targets and we are taking aggressive steps to ensure that we significantly improve execution in fiscal 2009 and beyond," THQ president and CEO Brian Farrell said in a statement.

Specific steps include improving the quality of THQ's games, offering a "stronger slate of products," and realigning the company's cost structure. In a conference call with investors, executives said they would be reducing the company's global workforce by around 200 in the near term, but hoped to add those jobs back to the headcount and then some by the end of the current fiscal year.

For that current year (the company's fiscal 2009), THQ hopes to return to happier days of hit games and black ink. The publisher believes its upcoming slate of games compares favorably with last year's, spearheaded by titles like Saints Row 2 and Red Faction Guerilla. For the full year, THQ is projecting sales between $1.18 billion and $1.20 billion, and earnings per share between $.95 and $1.05.

In after-hours trading, THQ shares were selling down more than 6 percent to $19 from $20.35.

54 Comments

  • boerescu

    Posted May 9, 2008 2:13 pm PT

    well it's no wonder... i mean look at Juiced 2, is there anyone here that beleives that game ever sold more than 1-2 copies/week? it's horrible. anyway it's a pitty coz THQ had other very cool games, the other guys mentioned them

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  • patton101

    Posted May 8, 2008 8:44 pm PT

    Gee. Maybe EA should buy all their shares.

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  • nate1222

    Posted May 8, 2008 5:12 pm PT

    @jknight5422
    Check out Red Faction 2 on PS2/XBox/GC. You can find it dirt cheap at Gamestop/EB.

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  • lhardwick692

    Posted May 8, 2008 4:32 pm PT

    thats good--cut 200 plus people from work--put them on the unemployment line--thats good for the economy--its stable enough to handle more----come on--your sales may be down but still million dollar company--cut your crew now is kind of senseless----keep them working then if next years is down--dont fire them but maybe cut back on hours given to the working people making the games--thats what the companies i have worked for in the years i worked --cut payroll a little until sales pick up--but then that will only hurt game programming and release dates

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  • markimsoad

    Posted May 8, 2008 7:18 am PT

    THQ classic "Supreme commander" is a fantastic game... remember me Total Annihilation ... Good Times!!!

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  • jknight5422

    Posted May 8, 2008 5:18 am PT

    Sounds like the typical a-hole corporation to work for. We lost a tiny bit of profit, so let's put several people in the s-can to make up for our team-oriented screw-up.

    On the upside, I'm looking forward to the new Red Faction: Guerilla. What is odd is that I've never even heard of this game until today & this apparently the 3rd in the series! wtf.

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  • darobinson67

    Posted May 7, 2008 7:31 pm PT

    i thought stuntman was a descent game, too bad for thq, im looking forward to saints row 2 though.

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  • lamprey263

    Posted May 7, 2008 4:09 pm PT

    Hmmm, let's see... port Dawn of War and all expansions to the X360/PS3 and make up your losses in no time!!!

    Or how about porting Homeworld 2 to the consoles!! It's been rumored that they got the IP from Sierra since Relic switched ownership, and if they haven't I'm sure they could acquire it at a fair price.

    Take a hint. Multiplatforms really help make companies a lot of money.

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  • Gruug

    Posted May 7, 2008 3:13 pm PT

    Unfortunately, THQ is getting a reputation similar to EA. They are putting out QUANITITY over QUALITY in their games. I had thought THQ had learned their lesson from several years ago but apparently they are getting a little sloppy again. I know I will think twice before purchasing a THQ game in the future. Not sure I am at the point of boycotting their product like I am boycotting EA.

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  • dreamcastdre

    Posted May 7, 2008 2:12 pm PT

    As long as the Saints Row franchise is ok, everything else is secondary to me.

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  • RtheGamer

    Posted May 7, 2008 1:30 pm PT

    It's all about the games and unfortunately THQ has been coming out with some really uninteresting games, Stuntman was un appealing, Juiced has been done to death and Frontlines is a typical war game, even if it is good the market is saturated all ready. They need some good originality on their side until then, they will continue to fall.

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  • nate1222

    Posted May 7, 2008 12:46 pm PT

    The development costs are killing the industry more than piracy, quality or anything else.

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  • mr_killer_man

    Posted May 7, 2008 12:13 pm PT

    THQ has made some of the lamest games and most of them are back on store shelves and bargain bins. If they keep on making these lame games with too many glitches and rubber band AI they will keep on loosing millions.

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  • imnotwhite

    Posted May 7, 2008 11:46 am PT

    IF EA buys this it will show how much they rely on sports

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  • 99X

    Posted May 7, 2008 10:40 am PT

    when will corporations get that you can't always be growing... there will be times that you have to level out. If it weren't for the greedy stockholders, more companies could relax and give consumers a break.

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  • prolink47

    Posted May 7, 2008 10:23 am PT

    i hope EA does take THQ out it doesn't deserve to be a company

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  • MogFromLeipzig

    Posted May 7, 2008 9:52 am PT

    yeah, better quality as a result!^^

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  • kos1085

    Posted May 7, 2008 9:36 am PT

    Thats a huge loss. Dont know if THQ can last much longer with losses like this.

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  • Bren128

    Posted May 7, 2008 9:22 am PT

    ouch, next thing you know EA will be offering to buy them out

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  • ps3thabest

    Posted May 7, 2008 9:19 am PT

    they should make a wwe vs tna game or maybe ufc

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  • VenomRitual

    Posted May 7, 2008 8:56 am PT

    I've played to many bad handheld games made by THQ. hope they do better this year

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  • otanikun

    Posted May 7, 2008 8:10 am PT

    Better start cranking out better games THQ, it's because there aren't any extremely popular properties from them, I mean they have to beat out Bungie, MTV Games and the Monopolizing company EA Games, as well as a giant like Take-Two and Rockstar Games.
    They need something to sell well, not oh this sounds like a good game so lets rush it into production and do a half ass job on it; that ain't gonna fly anymore in this biz.

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  • nobeaner

    Posted May 7, 2008 7:56 am PT

    Let's see. They made 1 billion dollars and are squabbling over the 35 million they "projected" to make. I just wish I had those kind of problems.

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  • Gooper_Blooper

    Posted May 7, 2008 7:27 am PT

    Maybe Deadly Creatures can give THQ a boost.

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  • swisdwag

    Posted May 7, 2008 7:24 am PT

    Will Saint's Row 2 really compete with GTA4? I'm thinkin no, but at least we'll have another open-world gangster game to play once we've all completed GTA.

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  • jrhawk42

    Posted May 7, 2008 6:44 am PT

    With Saint's Row 2 coming out soon THQ will pretty much have their profits for 09. Not to mention they've got 2 warhammer 40k projects in the works, a Big Huge Games RPG, and Red Faction 3 coming out hopefully in the next 2 years. That's 5 high profile projects so odds are at least 2 will be big money makers, not to mention their strong kiddie game licenses which may not be critically acclaimed, but they do rake in the cash.

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  • Nomad0404

    Posted May 7, 2008 6:33 am PT

    LindBergh2007 - You could be right but I suspect you are wrong.

    The company has sales of over $1,000,000,000 USD all they need to do is sort out their costs. Surely developing games that are never released has a huge impact on the costs of the company.

    I think they'll turn it around. Nothing else seems to point towards a recision in the computer game industry. It won't be imune by any standards but I bet there are plenty of other industries around the world that will be more badly affected.

    Phil

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  • peeweeshift

    Posted May 7, 2008 4:34 am PT

    with games like that of course it lost money

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  • Cabal23

    Posted May 7, 2008 3:52 am PT

    isOlation, what are you talking about better games? Uh they have some of the biggest games that have come out in years. Company of Heores, Dawn of War. The problem isn't the quality, it's the quantity. Go look at there web page and look at the number of garbage titles they have. Tons of kids games and a bunch of bargain games. Much like Starbucks, too much, too soon will kill you business. They need to make less moronic games and concentrate on a few really good games. And dropping prices won't help a company that is losing money. Hell pc games are already $40 new...can't beat that and all console games will always debut a $60.

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  • bostadskontrakt

    Posted May 7, 2008 3:49 am PT

    Remember people: sales are up (they are selling more and more for every year) but profits are down. Meaning the cost structure and margins (affected by cost structure) is what needs to be adressed. Obviously the games are considered good enough by market or sales wouldn't keep climbing. Some people here are drawing incorrect conclusions of the news.

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  • is0lati0n

    Posted May 7, 2008 1:25 am PT

    DAYUUUUM. THQ needs to develope better games.

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  • Wuflungdung

    Posted May 7, 2008 1:08 am PT

    just shows how companies charge too much for games. Drop the prices and more copies will be sold.

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  • LindBergh2007

    Posted May 6, 2008 10:57 pm PT

    That's the fourth 3rd party publisher in finicial trouble. First Take 2, then Midway and Eidos and now THQ.

    Mind everyone who thinks that I'm wrong. These aren't just little developers suffering losses these are HUGE american publishers! When big U.S. publishers suffer quarter slumps THAT's not a goood sign for the U.S. game industry it's an indication that a industry collapse possibly a crash or something close may be on the horizon. Let's face it. The 3rd party market is in trouble. It's become way too competitive. Much like we saw back in 1983, too many publishers are buying way too many developers as a result, many smaller developers are closing shop. This is one of the causes of the 1984 crash when Atari was trying to buy out the rights to so many titles and small publishers many who folded quickly.

    Look you don't have to believe me. I'm looking at indications here. It's not looking good for the U.S. game industry, with rising development costs it looks like the recession may begin to impact the gaming market. After all it's mostly the western publishers in trouble.

    If this trend continues, we could see a collapse like 1983-84. With big western publishers in trouble, this could result in less games for the current consoles and could cause sharp declines in hardware. Those of you that paint a rosy picture of american game market need to wake up and smell the coffee and study the statistics.

    You don't have to believe me. But I'm looking at the metrics here. We are headed for a huge collapse and you just don't see what I and others see as a major slump period, if there is a crash it would change the industry and bring alot of good to it. For instance Sega would no doubt be pushed back into the hardware market.

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  • yboucher

    Posted May 6, 2008 10:28 pm PT

    The quality just wasn't there. That simple.

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  • Merl57

    Posted May 6, 2008 9:34 pm PT

    this is still a good company shouldn't worry too much

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  • ItsEvolution

    Posted May 6, 2008 8:54 pm PT

    Time for a new version of WWF No Mercy!!

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  • UltimateXShadow

    Posted May 6, 2008 8:33 pm PT

    THQ, if you want to stay afloat, please don't make an "iCarly" game.

    • Login to rate this comment
  • Taegre

    Posted May 6, 2008 8:28 pm PT

    Hopefully it's too late for any of this to interfere with Saints Row 2. THQ better not cut a penny out of Volition. They may not know it, but they have one of the most talented studios out there, and Volition hasn't been getting the attention it deserves as of late.

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  • Paulf001

    Posted May 6, 2008 8:27 pm PT

    Most of their games are bad to crap so no wonder they would be having trouble. People these days won't send their money on shovelware.

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  • Montrealien

    Posted May 6, 2008 8:09 pm PT

    It's always bad for the industry when a publisher is having issues, let's hope they pull through. And to all the analysts down there. Go work for and change these companies if they are so bad instead of just judging and complaining here.



    THQ is ok, and has been here for a long time, give them a little respect and hope these money issues get fixed.

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  • Tebbit

    Posted May 6, 2008 8:01 pm PT

    I couldn't care less for Saints Row 2 at the moment, but a new Red Faction is gonna be fantastic!

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  • AvIdGaMeR444

    Posted May 6, 2008 7:54 pm PT

    I hope THQ isn't pushing Volition to release Saints Row 2 pre-maturely. After reading about the $35 million loss, I wouldn't be surprised if Saints Row 2 ships with tons of glitches and bugs, and is somewhat unfinished. I guess we'll have to see what happens...

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  • ToxicMold

    Posted May 6, 2008 7:16 pm PT

    I'm not surprised. The vast majority of their games are not good.

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  • polsci1503

    Posted May 6, 2008 7:12 pm PT

    THQ has to be smarter about the brands they put their money behind. Their games are not built to be AAA games but they do know how to make good games. They've just wasted effort sinking development money into bad franchises. Stick with Saints Row, Westlemania, etc. Heck, even Conan was decent. But Stuntman and Juiced were already failed franchises when THQ bought them - why would you do that? You were just asking for trouble with those two.

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  • Obliterati

    Posted May 6, 2008 7:11 pm PT

    To be honest, if a major company like THQ can't make money in this day and age, something is seriously wrong. Right now video games are basically a license to print money. Hopefully Saints Row 2 will kick arse and help them get back on track...

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  • EPaul

    Posted May 6, 2008 7:07 pm PT

    After making "battle of the bands" i cannot bring myself to feel sorry for them

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  • zintarr

    Posted May 6, 2008 7:00 pm PT

    I call BS!!!!

    In March of this year they still awarded their CFO 150,000 in stock worth around $3M. Furthermore they had $1.02B in revenue last year with $393M in Gross Profit. What THQ is doing is the standard corporate crap so they do not have to pay out a dividend.

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  • DonutTrooper

    Posted May 6, 2008 6:55 pm PT

    THEY DESERVE IT!

    I don't give a damn about whatever good games they make, they are still the ones who make most of the awful movie-based games, and for that I refuse to buy any of their games. If they didn't get away with this stuff, then the movie industry wouldn't be able to trample on the games industry by adding a cheap extra which keeps programmers and developers from making REAL games, not a 360/PS3 version of Pirates of the Carribean with graphics that could pass for an n64.

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  • OfficialBed

    Posted May 6, 2008 6:46 pm PT

    they need to learn how to make games that are good

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