[UPDATE] Struggling publisher's annual earnings slip to $830 million; Volition's free-range crime actioner a solid hit; Warhammer 40K franchise sells 4.5M, Saints Row series at 5M.
THQ's 2009 fiscal year was, to put it politely, turbulent. Facing mounting losses on sinking revenues even before the global economy took a dive at the end of 2008, the publisher has enacted sweeping company-wide changes that include $220 million in cost-cutting measures at the cost of nearly a quarter of its global workforce.
Today, THQ's financial status snapped into focus, as the publisher reported that revenues for its fiscal year ended March 31, 2009, had slipped 22 percent to $830 million. Losses for the period expanded dramatically, with THQ posting a net loss of $431.1 million during its 2009 fiscal year, compared to $35.3 million in the red a year ago.
Breaking out its performance during the January-March quarter, THQ said revenues slipped 9 percent to $170.3 million, with losses totaling $96.9 million. Top sellers for the publisher during the period were WWE Legends of Wrestlemania and Warhammer 40,000: Dawn of War II. The publisher also said that Saints Row 2--developed by layoff-target Volition Inc.--has now sold 2.6 million units worldwide.
"In light of a challenging fiscal 2009, we have substantially completed a significant realignment of our business to position THQ for profitability and positive cash flow in fiscal 2010," said THQ president and CEO Brian Farrell said in a statement. "We have taken decisive actions to achieve our cost saving objectives, eliminating $220 million in cash expenditures while at the same time implementing a focused product strategy. We are investing in the brands and products with the highest potential to drive THQ’s long-term profitable growth."
THQ also announced today that it has secured a $35 million line of credit at Bank of America--itself an institution that needs to raise $33.9 billion in capital to satisfy government regulators, The New York Times reports. As noted by THQ CFO Paul Pucino, "In today's economic environment, we are pursuing this credit facility as a prudent backup to our $141 million cash and short-term investment balance at March 31, 2009."
Looking ahead to fiscal 2010, which runs April 1, 2009, through March 31, 2010, THQ expects to increase upon that cash balance by $50 million by year's end. Top releases for the publisher include Darksiders, Red Faction Guerrilla, UFC 2009 Undisputed, and WWE SmackDown vs. Raw 2010. In addition to the previously revealed mass-market titles MX vs. ATV and All Star Cheer Squad 2, THQ expects to announce three more titles of the casual-oriented ilk for release during the current fiscal year.
THQ is holding its quarterly conference call with investors this afternoon. This story will be updated with details as appropriate.
[UPDATE] Highlights from the conference call are listed below:
--THQ CEO Brian Farrell said that the Warhammer 40,000 franchise has now shipped more than 4.5 million units, while the Saints Row franchise has sold nearly 5 million units. WWE SmackDown vs. RAW 2009 also shipped more than 4.5 million units during the 2009 fiscal year.
--CFO Paul Pucino detailed a number of reasons THQ sales dipped during the fiscal year. Namely, the financial officer noted that WWE franchise sales slipped 24 percent, kid-friendly game sales fell 38 percent, and currency exchange rates were unfavorable.
--According to Farrell, THQ is not expecting Sony to cut the price of the PlayStation 3 at E3, though he does expect a price cut to occur later this year.
--Citing figures from Microsoft, Farrell said that UFC 2009 demo downloads are in the top 1 percent of all demos released through Xbox Live. Red Faction is in the top 7 percent, said Farrell.
I'm a fan of THQ I seriously am, they are a pretty good company that I see myself relaying on more now then I have in a while. I use to be a big E.A. product buyer back in the day of genesis and snes golden years. But since E.A. has gotten soo big and soo lost on what standards are that make a good game I find that THQ is probably one of my fav company's the last two generations...
All I care about is the ufc license. It looks like they're doing a great job with undisputed, and I hope they can continue with future ufc games.
THQ made a good move picking up the rights for UFC and are doing a hell of a job. Going to support em by reservine UFC and picking it up on release day.
I am all for UFC Undisputed, I've plkaye dthe heck out of the demo and really liked it. Can't wait to have some of my dream matches occur....at least in video game world :)
djezhel619: not when you take into account the sheer amount of titles they are putting out. When every other game THQ seems to sell, how do you explain them losing the amount of money they have. I doubt they are selling a million Baby games or a million horse games, hell, I'd bet they don't even sell 100,000 of each, and that's only 2 games out of how fricking many.
angelGP32 sure buddy, and no wonder the Wii and DS are still outselling any console. Shovelware or not, im sure they make more money selling those games cuz they are cheaper to make then some high budget blockbuster game on 1 or 2 systems.
I never thought THQ would be in a similar situation as Midway. I'm worried about the future of WWE games under THQ production. Especially the new Legends of Wrestlemania. which would be a shame to cancel without a much improved sequel. I'm rooting for THQ to get out of this mess.
@Damnation_6. Yeah, and Ubisoft will be next. How can you sell as much on single games and still lose a boatload of money? By investing in DS and Wii shovelware. Ubisoft, god love them, make awesome games like Assassins Creed and GRAW, but damn do they have a lot of shovelware, probably more than THQ.
I love THQ and they always make my favorite games. WWE games, UFC 09. Saints Row series. Awsome Warhammer games. They are completely awsome. Like I said, its my fav. games. ITs like they make games just for me. I hope they do good.
damn they better pull through saints row is my favorite seris and i really want 2 see a 3 installment
Prior to Dawn of War II they said the DoW Warhammer 40k franchise had sold 4 million units, which leaves only 500,000 for Dawn of War II. That could not have helped earnings much just prior to their end of year!
I hope THQ will get out of this mess....I really don't have problems with them. Never had to get in touch with Technical support cause everything always works for me. (I never saw how buggy Saints Row 2 was cause I bought it a few months later) The people complaining that Red Faction has gone 3rd person clearly havn't tried the demo yet. Red Faction 3 is gonna be a lot of fun by the looks of things. The first Dawn of War had enough expansion packs...I'm glad they did something different with Dawn of War 2. And besides...that was all Relics call, THQ just publishes stuff. And for the crappy DS game....well, most companies bring out a load of bad DS and Wii games to be honest.
May the lesser developers flail and die, then harvest the talent of those companies consolidating the industry into large studios. Fox, Universal, Paramount... EA, Ubisoft, Activision. I cheer for the underdog but it's the nature of business. I just hope the consolidation embraces innovation and the fan bases instead of numbing creativity and turning it's back to the fans (Nintendo *Cough*Cough*)
Maybe, there needs to be less gaming companies making less games. it seems like everyone is losing money. it is because they put out 5 different WWII shooters for the same system every year.(just an ex, tons of genres do this). Then companies are in shock when they all lose money. Make less games, but at a higher quality, then they will sell more, and people will play them for longer then 2 months.
To many places are losing to much money. And most or you people are so stupid in most of your comments your all like well they make stupid games and suck anyway. You do know that if this trend continues and if game developers keep going under gaming is going to become a lot worse because they won't spend as much money on making the game right.
well i hate thq but darksiders is a must joe madure or whatever is the lead artist and storywriter he did battle chaser the comic and late 90s x men great artist the game is a hybrid of god of war fighting with legend of zelda exploring. this will go under the radar when its released i bet cuz of the finnacial problems but i will buy this game day one lets hope its not a cookie cutter like the rest of thq games.
They turned the Red Faction series (one of my favorite old FPS) into a 3rd person shooter. WH40K DW2 wasn't really even an RTS, another change from a favorite series gone down the tubes. Saints Row isn't GTA, plus when the PC port is a buggy mess of course you aren't going to make money off of it. They make wrestling games, doesn't that say it all right there? They have killed a few really good potential series over the last year or so, unless they do something to change that I won't be buying.
what happened to THQ?? Have you seen what the majority of games they have at retail are??? Yeah THQ, keep pumping out the shovelware DS and Wii games. You know where the money is, look how well Saints Row is doing, but yeah, pump out 50 more shovelware DS titles.
Red Faction's trailers look dated now. Let's hope Red Faction is more then just a third person game with destructable environments. UFC 2009 looks spectacular! But, so did it's predecessors and their gameplay mechanics made them flops. Let's hope the same doesn't go for this year's release. Smackdown had a great release this year. But for 2010, they're going to need a lot more to entice people to byu it. A roster update, and onew new match type will not be enough. Personally, I feel that THQ has leaned on their WWE license for too long. You need to spend money to make money. For Smackdown, I would extend the dev cycle to two years and keep players busy with downloadable content. This should ensure that Smackdown is a better tuned fresh experience with each release. They should also look to create new quality franchises to rake in more revenue. Of course, this advice comes late as they seem to already be on the downward spiral :(
theone86: EA did take a crack at a wrestling game, actually two. They did WCW Mayhem and WCW: Backstage Assault. They both sucked IMO.
I don't care too much for the wrestling games anymore (The last one I bought was SvR 2007), but I love the Saints Row series, and from what I played of the Red Faction demo, it seems amazing. I hope THQ can rebound from this.
THQ is getting to be like Midway. I don't want to see them go because they can still occasionally make some good games, but aside from their licensed games that sell on name-recognition alone they have a really shallow lineup. I wouldn't mind seeing them being integrated by a bigger developer that could streamline their operation. I've been saying for a while now that EA should take a crack at a wrestling game, anyways.
I know I know. I badly wanted Dawn of War 2, but if THQ and Steam team up, then I lose coz I can't get the frigen thing to work. Too late anyway. Got my money back, so I'll get something else.
They have a solid line-up minus a game or two. WWE games always sell well, UFC has gotten amazing response from gamers and will probably outsell Smackdown vs Raw 2009. Saints row is a very fun game as well.
Well if THQ goes down anytime soon, they'll do so in a blaze of glory. But I can't see how the publisher for DOW, Saints Row AND Red Faction could keep doing this badly...
Saint's Row 2 is awesome. I can hardly even play GTA now. Hope they make a third one, I'll get it the day it comes out.
This post was good enough to be repeated... green_dominator Posted May 6, 2009 5:02 pm PT THQ is a good company but honestly THQ and all other companies need to learn is that the main buyer of all games are 19-30 yr olds, this means kids really aren't the force they were in the eighties, The kids playing games in the eighties are now working, grown up and still play games. That said they need to stop making so many kids games and focus on real quality material....... Saints Row, UFC and Red Faction are good but If I was them I'd drop all the dead weight in their library of games..... I am 34, btw, and I couldn't agree more.
I liked saints row 2 but I thought it was released at the wrong time It was automatically going to be compared to Grand theft auto 4 and all though i liked saints row 2 more The mainstream of gamers did not.
Well i hope the UFC game is going to be good and they should make another Saints Row thats a pretty fun game to play alot of people slept on it.
THQ should eliminate all kid friendly franchises. They are good at making violent games, whether they are 3rd person, sandbox, or Real time strategies.
Well, I'll be doing my part to support Volition and THQ. I played and enjoyed the Red Faction Guerrilla demo, so I'll definitely be buying it this June.
at least Dawn of war games are to get sequels and add-ons packs for years to come according to THQ http://ve3d.ign.com/articles/news/46830/THQ-Reports-431-Million-Loss
I don't like THQ. Their tech support left me out completely when I couldn't get Company of Heroes TOV to work. So I sent the game back and got a refund for this very reason alone. Then Dawn of War 2 and Steam started playing up on installation. I sent that back for a refund as well. Maybe it's my system of course. But hey, every other non THQ game works beautifully for me. Good luck to em I guess.
THQ is a good company but honestly THQ and all other companies need to learn is that the main buyer of all games are 19-30 yr olds, this means kids really aren't the force they were in the eighties, The kids playing games in the eighties are now working, grown up and still play games. That said they need to stop making so many kids games and focus on real quality material....... Saints Row, UFC and Red Faction are good but If I was them I'd drop all the dead weight in their library of games.....
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