On January 22 at 14:00 Eastern Time, THQ's assets will be going to auction in a move that will result in the publisher's intellectual properties either being sold individually to the highest bidders, or the entire company going to Clearlake Capital Group for a reported $60 million. The move will herald the final chapter of THQ's slow and public demise, but the outcome will mark one of the most significant signs of just how much the games industry has shifted during the current hardware generation.
THQ was founded by Jack Friedman in April 1990 as a toy company with intentions to take part the burgeoning video game scene. One of its earliest success stories was an adaptation of the movie Home Alone in 1991, with the game developed by Bethesda Softworks on the NES, Sega of America on Mega Drive and Game Gear, and Imagineering Inc on SNES.
Despite its commercial success, the game was not warmly received at the time. "If I had one wish, it would be to visit every Mega Drive owner in person and tell them not to buy this grotesquely over-priced and pathetically under-developed mockery of a game," said Amanda Dyson in her 24% review of the game in issue 3 of Mega way back in 1992.
These were titles you'd never want to unwrap for your birthday, but ones you'd probably end up buying with your leftover Christmas money.
Yet these early successes helped establish THQ's business practices, and for the next two decades the company would focus predominantly on producing low-cost, licensed titles for a mass-market audience. Over the years THQ would snap up the rights to make games for Ren & Stimpy, Where's Waldo?, Wall-E, The Incredibles, Evil Dead, Rugrats, Spongebob Squarepants, My Little Pony, Bratz, Avatar, Alex Rider, Warhammer, Star Wars, and its absolutely crucial WWE license. THQ even saw fit to pump money into surprising cult classic 50 Cent: Blood on the Sand after grabbing it from the list of games dropped as part of 2008's Activision-Vivendi merger.
While the majority of THQ's output has often left something to be desired in the quality stakes, the publisher at least understood - at the turn of the millennium, anyway - its place on shop shelves. THQ games received deep, alluring discounts around the holidays; these were titles you'd never want to unwrap for your birthday, but ones you'd probably end up buying with your leftover Christmas money.
…of the end
Games publishers are almost universally going through a hard time right now, but 2012 was an especially horrible year for THQ. At the start of the year it was almost removed from the NASDAQ stock exchange as its share price had bottomed out to cents from the respectable $30 it was claiming in 2007, hundreds of staff were made redundant, and CEO Brian Farrell took a 50% pay cut. Even Take Two president Strauss Zelnick took some time out (from doing things like appearing on the front cover of Men's Fitness) to publicly declare that "THQ won't be around in six months" in April 2012. Well, at least THQ managed to prove him wrong on that - the publisher might manage nine months.
It was definitely a bad start to the year. And things would only get worse. What, exactly, had gone so wrong with THQ?
Chief among THQ's problems was indubitably uDraw, the console-based graphics tablet that completely flopped at retail. Fussy, unpopular and grossly mismanaged, the only person who really benefited from the epic bungle of uDraw was the landlord charging rent for the warehouses currently housing the 1.2 million unsold units.
uDraw was THQ's attempt to get back onboard the lucrative children's market, an area it dominated in the early noughties but one it lost control of as soon as the Wii came out. Its licensed properties simply weren't selling or were drying up - the publisher lost its arrangement to publish games based on Disney movies - and its attempts to carve out new IP floundered, culminating in the critical savaging of Homefront in 2011. THQ closed developer Kaos Studios shortly afterwards, with the game's 2.6 million shipped units not quite the Call of Duty beater its publisher wanted.
Fussy, unpopular and grossly mismanaged, the only person who really benefited from the epic bungle of uDraw was the landlord charging rent for the warehouses currently housing the 1.2 million unsold units.
The problems keep on coming: its mismanaged attempt to enter the once-powerful MMO genre with Warhammer 40,000: Dark Millennium was cancelled and restructured into a single-player game that's now gone MIA. Plus the publisher's two high-profile IP announcements, Guillermo Del Toro's Insane and Tomonobu Itagaki's The Devil's Third both had their rights transferred back to their respective studios.
Heck, even a tattooist sued the publisher for its replication of Carlos Condit's lion tattoo in the commercial flop that was UFC 3.
It came as no real surprise that, after months of back-and-forth with creditors, THQ's downward spiral continued until the company finally filed for Chapter 11 bankruptcy on December 19.
Speaking in a statement at the time, Brian Farrell said "the sale and filing are necessary next steps to complete THQ’s transformation and position the company for the future, as we remain confident in our existing pipeline of games, the strength of our studios, and THQ’s deep bench of talent."
"We are grateful to our outstanding team of employees, partners and suppliers who have worked with us through this transition. We are pleased to have attracted a strong financial partner for our business, and we hope to complete the sale swiftly to make the process as seamless as possible."
What happens next?
Right now, THQ has three announced games hoping for a swift and successful conclusion to its auction on Tuesday. Those are South Park: The Stick of Truth and Metro: Last Light (both currently pegged for a March release) alongside PC RTS Company of Heroes 2. Even though those games are almost certainly in the final stretches of development, it's no certainty that they'll hit their release dates - last week US retailer GameStop pulled Metro: Last Light from its digital storefront and offered refunds to customers. Speaking to GameSpot, VP Matt Hodges said "due to THQ's current financial situation and uncertainty of delivery, in order to protect our consumers we removed the ability to pre-purchase that specific game."
As part of THQ's bankruptcy, though, the publisher has revealed five more games in production - though we only know the working titles of four at present. Those are Turtle Rock Studios' Evolve, THQ Montreal's 1666, Relic Entertainment's Atlas and Vigil Games' Crawler.
Finally, there's Saints Row 4 - THQ's most lucrative franchise going, and the one most rival publishers will likely be looking to snap up. EA, Ubisoft and Warner Bros. have all publicly expressed an interest in various chunks of THQ's assets ahead of Tuesday's auction. Even Double Fine has expressed an interest.
The THQ name might not survive the next few months, then, but with any luck its current slate of games will manage to see the light of day. Tuesday afternoon, then, looks set to be a big one for the games industry.