Goodbye To The Circus…
Last week saw the predictable but ultimately sad demise of THQ.
I say “sad” because THQ has, in recent years, become quite known for its good output of titles – not always perfect, not always entirely polished, but eager to please and happy to be doing it. Not always unique, or original, but just charming and lovely enough to really make you have a good time. But “predictable”, absolutely.
The problem with THQ was simple; it had, for some years, invested in projects that looked nice but ultimately came to naught. For example, the MMO-version of the Warhammer 40k saga, Dark Millennium Online. DM Online was an expensive and costly project that did what all MMOs eventually do to the unwary company; it burned a massive hole right through their budgets. Conservative estimates reckoned THQ had been prepared to spend $50 million on this game – but actual figures? Well, they were probably higher, and that happens. It has happened to Funcom, who admitted some time ago the budget for Age of Conan Online was way over what it should have been, prompting the inevitable and costly mistake of an early release; an early release that ultimately sank the game. Then you have Flagship Studios. Remember them? They were a bunch of ex-Blizzard employees striking out on their own with an ambitious sort of FPS-come-MMORPG-come-Diablo-come-Resident Evil-come-Silent Hill sort of strange concoction called Hellgate: London. And do you know something? I LIKED Hellgate: London. I liked it a lot. I liked it so much that when I reviewed it at the time, I came over all poetic and did the review in time and verse. Whilst also dropping the word “cock” into the piece. Just to ensure it didn’t end up too classy, like.
But yes, Hellgate: London sank as surely as it rose because the business logic behind it was not making money. They actively made it a point to give subscriber perks to free users after a few weeks, meaning they were always giving new things to subscribers but ultimately it was always trickling down. As four weeks became three, and three became two, there was no point in being a monthly subscriber. This was a little before we all hopped on the Free-To-Play bandwagons, which its new owners HanbitSoft were more than happy to embrace on its release, but it crushed Flagship Studios. And there are lots of examples of this. Last year, we saw 38 Studios run into this very same problem. An MMO, huge budget, unable to manage it properly. We saw this with the sadly dead Tabula Rasa – still one of my favourite MMOs, and one that it seemed simply ran out of money, and whose creator seemed less than happy to continue to fund. Going into space was more important than his professional reputation, which in my eyes lays in tatters on the ground. Hope it was worth it, Mr. Garriott.
And if you thought it was just studios that could sink, then look at Midway, and Acclaim. Acclaim were publishers as well as developers, and the home of Turok, The Simpsons and Crazy Taxi amongst others. Acclaim was a sordid tale in itself; it has many lawsuits in its time, was known for not paying royalties as and when they should and their quality output had diminished for some time, culminating in the truly inspired moment of “Jumping the Shark”, BMX XXX. Yup, a rude, naughty, nudey BMX game. By the end of its life, it had lost licences, lost franchises, lost itself and unfortunately ended up peddling that sort of smut to the market – a market that was growing bored of Acclaim. In 2004, Acclaim filed for bankruptcy.
Perhaps somewhat ironically, Acclaim’s franchises were bought out much the way that THQ’s were. And THQ, in one of those 20-20 “You couldn’t make it up!” moments, bought the Juiced! franchise from the smoking ruins of Acclaim.
It’s worth remembering those who fell before THQ because ultimately the pattern is the same; too much expense, not enough profit. Dark Millennium: Online was but a droplet of water on the tip of the iceberg sinking the good ship THQ however. No, to understand we’re going to talk about the uDraw.
“uDraw?”, some of you might ask, and how quickly we forget. uDraw was a tablet-like drawing system originally designed for the Nintendo Wii, and that in itself was fairly profitable; coupled with the price of the Wii, and many Disney-related tie-ins for the uDraw gimmick, it had a market and had found a market. There was nothing that wrong with the uDraw in itself, that is until THQ decided to ‘expand’ the concept, make it all HD, leave the Wii behind and push on to conquer the PS3 and X-Box 360 markets. Here’s the thing; don’t ever underestimate the good thing you might already have, or you’ll find out like THQ did, no-one will want you at the end.
The PlayStation 3 and X-Box 360 simply didn’t have the young audience that was required for their sales numbers to be justified; the Wii in itself was primarily seen by its own customers as a family experience, it was cheap and durable and sturdy. The PS3 and 360 markets were, dare I say it, older. Perhaps wiser, and perhaps not entirely convinced to let the children play around with it (something that flies very much in the face of much of the recent debate on youth and the effects of video games on them!). The long and the short of it was – it didn’t sell. It turned its back on the Wii, and ultimately pitched itself at a market that was grotesquely unsuited for it. Brian Farrell, then chief executive of THQ, said it was one of the worst mistakes he had ever experienced. Not that he wanted to take the blame or anything, but y’know, it was a mistake.
Right now, there are still 1.5 million unsold boxes of the uDraw somewhere, and the disaster of this project left THQ with a $100 million shortfall. That is the kind of thing you tend to notice. And then you come to THQ’s past. Something which must also factor into things.
For some time, THQ was content to play the middle-market role. It never really shone, but it was never that truly terrible and corrupt. It went undetected, in spite of its long heritage, because it had few ambitions. It had operated for a long time on tried and tested formulas and market mechanics that covered its bases. But as the market changed, THQ found itself tripping over itself to keep up. Gamers were becoming more knowledgeable, more gaming blogs and websites were creeping up to talk about the good games, and shoot at the average ones. THQ were good at okay, not-bad, so-so entertainment but as the internet became easier to access, faster and games became more and more prevalent and important in online discussions, it knew it could not operate any longer under the pretence of “Good is good.” So it began, recklessly, to put money into the likes of uDraw, and into projects like Darksiders 2 – I love the game, but commercially it’s like Beyond Good and Evil, a complete flop, and the frankly disastrous port to the Wii-U can’t have helped. And then you have Homefront, THQ’s attempt – and they made it very clear – at taking on the Battlefield and Call of Duty corner of the market. It was going to be amazing, brilliant and… well, it wasn’t. Not that Battlefield and Call of Duty are anything to write home about, but still, it was meant to be a big success.
Indeed, THQ were not prepared for the actual result. The moment review embargoes were lifted, and the press and public could get to savaging it, the game sank. Investors fled, dropping THQ’s share price by 25% in less than a day. And this is not to mention the careless and frankly confused messages we got with Metro: Last Light. A project that was originally the poster child for the Wii-U, and then mysteriously we wondered why it wouldn’t get a Wii-U version. Ultimately, the answer is simple; they couldn’t afford to make the Wii-U version as well. Money was tight. As much as we celebrated the lack of multiplayer – the reality is, by not coding and designing multiplayer, they were saving a huge amount of money on the project. Metro: Last Light has, sadly, felt like cut after cut after cut, and we can only hope its new owners are happy enough to restore original plans back to their former glory. Or Saints Row, a successful series in its own right critically and some would argue commercially, but talk is that the projects never broke even. How can a successful series like that NOT wipe its face clean? That does have to be asked.
It’s true to say no single thing sank THQ. I’ve mentioned several things here – but you can probably assume that I also think there were management issues as well as studio funding problems. Everything was falling apart too rapidly for THQ to hold everything together, and unfortunately that is why it crumbled in the end. It bloomed, brightly for a few years and liked by gamers for having the balls to do some of these games – even the not-so-good ones. And then it was no more. The star that shines brightest lasts half as long, they say, and THQ certainly shone brightly but only briefly. In the face of the inevitable, they put a brave face on but through the week, it watched as every franchise it owned was sold off to the highest bidder – Metro and the Volition studio (of Saints Row fame) to Koch Media, owners of Deep Silver – they of the fan-success story of 2011, Dead Island. Homefront went to Crytek, of Crysis fame. South Park went to UbiSoft, and Relic went to Sega. Piece by piece, until there was nothing but scraps and the poor, lonely child of Darksiders left. And that no-one wanted Darksiders in the sale horrified me most of all. A critically-adored title, on many of last years best games lists, and no-one wanted it? I mean, REALLY?!
But all these companies – and others like EA and Activision – should definitely pay attention to the fall of THQ.
Not because it wasn’t predictable, or expected, or inevitable. But because it proves that things can fall apart so quickly, it takes very little. A bird hitting the tail of a plane can be enough to send it into a nosedive, and if you can’t pull up in time, that’s a crash. The scavenging and frantic rush for its franchises demonstrates how cut-throat and quick the industry is to take advantage of the situation. THQ never meant to be superstars of the gaming world – they’d been mired in mediocrity and just doing what was necessary for so long. Then suddenly bang, there it is, in the limelight, and we could see it do great things, do some daft things and ultimately blow it all before being found dead in the toilet of a motel off the freeway.
It wasn’t a smooth life. It wasn’t always without its faults. But THQ were a part of the industry and, in recent years, really did give us some truly great games. But what can you do? THQ is ultimately responsible for its own demise. It spent millions it didn’t have, made great games that it couldn’t market or sell, and when they did sell, were clearly not making them anything in the way of profit. Carelessly throwing aside a perfectly good installed base for an item hoping to be a bigger star elsewhere, investing in an MMO that was already hopelessly delayed and late and no-where near making a true public appearance and with a Chairman and CEO as unpopular and reviled as Brian Farrell, THQ had been sinking for a while. We all should have seen it.
One person did. In April 2012, Take-Two’s CEO, Strauss Zelnick, stated that he believed that THQ would not be around in six months’ time. Perhaps not the nicest thing to say when you know a company is in trouble, but let’s face it. His timing wasn’t that far off, was it?
THQ is ultimately another example of this idea of “Too Big To Fall”. THQ was a behemoth, a massive entity with many studios and franchises. It still fell. It couldn’t negotiate better terms, couldn’t manage its money and ultimately paid the price. It demonstrates very clearly that nothing is immune. We’ve enough bodies on the pitch – from Sega to Atari, Acclaim and Midway to the struggling wreck that is Sony’s current position – to really make this clear to all. Things end. Things need to end sometimes. Things grow in the void, new life happens. Maybe a new company, or an old and trusted one, will sidestep in to fill the space left behind.
We can only hope, and hope that people paid attention to the failings of THQ.
Perhaps a course at business school. Do they teach bad businesses at business school? I remember when I was studying English we actually did a few stints on terrible writers and novels, deliberately as light relief amidst the rest of the course. Especially the naughty stuff. There’s nothing more funny than novels that think they are sexy, and just so aren’t.
I suspect very soon, Fifty Shades of Grey is going to end up in that position… although quite honestly, they might need longer than the four weeks we got to dissect that one…