[El_TigroX]

I received this in my inbox (I was BCC'd - but have taken out the e-mail addresses of the people on the board it was sent to). I have no idea who it's from... but it was an odd thing to get at 12:30 a.m.

To: THQ Board of Directors Lawrence Burstein, Uhf Incorporated James Whims, Gigex, Inc. Henry DeNero, Arcturus Capita Brian Dougherty, AirSet, Inc. Jeffrey Griffiths , Lumber Liquidators From: Current and Ex-Employees, Shareholders, and The Public Dear THQ Board, I am an ex-employee at THQ. I saw the tweet-started headlines over the past week from an “industry expert.” This expert is one who I and my friends and co-workers in the industry have never heard of after a long time in the field. I had been reading the various following articles and accounts and it generated sympathy for friends both recently laid off and currently still there. I thought it would be a good idea to send a note with their input. This note has honest facts and thoughts about THQ and the current problems there. Most of these facts are public knowledge and they have been confirmed by public records or can be confirmed by current and former THQ staff there both before and after my and their time. I have long felt the need to explain to outsiders how this beaten-down company has wound up in this position. It is to the point where having it on your resume is not a point in your favor. And that shouldn’t be the case. I’m/We’re sending this note anonymously because some of us are still awaiting final checks and others know how little corporations like employees who air their dirty laundry. We feel the need to say something to combat the partial misinformation being written. THQ had been known through the years for having a formula. They find a hot license, make a cheap game, barely advertise it, and make money. This formula worked during the Playstation and Xbox and Gameboy days and made the company a lot of cash. Unfortunately, THQ’s old guard executives seem to be stuck trying to manage the company the same way they did back then and haven’t realized the industry has changed. The beginning of the end came years ago as Brian Farrell lead an executive team to acquire a large number of studios. A large amount of cash was used in the acquisition or setup of game developers with different degrees of talent. The problem was they were bought without strategic reasoning or specific plan on to use them. So after awhile another large amount of money was spent as those studios failed and were sold off and shut down. The executive team at the time were an entirely different group of people with one key exception in the CEO. The CEO/the then executive team wasted the cash that the company had built up with these massive investments and selloffs. The studio purchase errors were not helped by the mistakes in the licensing deals that were signed by the same CEO. Millions and millions of dollars were wasted on acquiring licenses at the same time the kids, family, casual business was declining at a rapid rate. Instead of slowing those acquisitions he overpaid for more of them until again cash was wasted in paying for brands that didn’t sell well anymore. The mistakes in decisions and cash losses triggered wave after wave of layoffs. In the most recent wave, about 40 people lost their jobs this past December through no fault of their own. The reason why is the chronic and constant mismanagement of their company. The fact is that the CEO and executive committee were so focused on trying to hit an unrealistic financial goal that they bet everything on an extremely risky proposition in the uDraw tablet. When they lost, they further displayed their lack of management skills by not having a contingency plan. Three weeks after the game launched, an entire business unit was wiped out when it didn’t meet its goal due to relying on that one product to hit an unrealistic target. After the layoffs many ex-employees walked around shell-shocked and trying to figure out who was responsible. They came to the understanding that most of us do after leaving the company. The issue with THQ has never been one of lack of staff creativity, intellect or business intelligence. It all rests of the failure of its management team and you the Board of Directors. This Board has allowed the Brian Farrell, the CEO, the ongoing ability to take a cash-rich profitable company and drive it from a $30 share price down to around $.70 without acting despite numerous mistakes that even for those lacking business training, could see were errors. Even without glaring mistakes how can the same CEO stay in charge after a 99% share price loss? Aside from the board, who is responsible for the current situation and who is accountable for the current and future job losses at the company? When you ask the recently departed who are a good source of information, you get the same answers. This uDraw failure is the largest and most recent one in a string of them that were hushed over and hidden. The answer aside from the Board is the current executive team that allowed this uDraw implosion to happen. Brian Farrell, CEO with a 2011 salary of $1,289,558, for a lack of business intelligence or fiscal accountability. A vocal inside group pointed out the mistake of trying to launch a year-old product that received almost no software support in the last 12 months. Instead of listening and having a back-up plan, he went ahead and invested a ridiculous amount of money in the manufacturing and advertising of the product and failed miserably. It is passed time for him to go. We are wondering what is taking so long for you to act. We have been wondering this same question for a long time. Martin Good, EVP and head of Kids, Family, Casual with a 2011 salary of $1,198,023, for bringing no strategic thought or business sense to the role. He was brought out from Australia sales to replace an outgoing head of the business unit and rapidly displayed a complete lack of leadership skills, vision, and any sort of analytical sense. Looking at his compensation package, he is an excellent negotiator as his salary is higher than anyone’s except for the CEO. On the plus side he lost his job with the rest of those laid off. On the minus side, he will be floating down on a golden parachute while the rest of the former employees scramble to look for jobs in this challenging environment. Most of those jobs will be at studios in other parts of the country, so they will be forced to relocate their families in the middle of their childrens school years. It is incredible that he made this level of income while doing such a poor job, but it serves as a reflection of the lack of Brian Farrell’s ability to staff well and manage. Paul Pucino, CFO with a 2011 salary of $674,855, for not planning for this possibility and having a safety net or a plan to cover THQ just in case of failure. We have a line of credit that we likely used to buy the plastic that is not selling to customers. It is like taking a cash advance to buy THQ stock and just as worthless of an investment. Paul is known as an absentee executive who is missing when business situations gets complicated. While he was in the loop at the point of the risk, with the following failure he has been clearly unavailable. It is another example of Brian Farrell’s inability to staff. Ian Curran, EVP and head of global publishing with a 2011 salary of $1,037,047, for not flagging an unrealistic sales goal to the CEO or the Board when a big part of the corporation felt the numbers were unrealistic. He blindly held up an unachievable target and didn’t act when multiple people told him he was aiming to high and out of step with the marketplace. If a sales executive’s job is to anticipate the market, he has done a poor job of it. Another example of Brian Farrell not being able to find the right people for the right job. Ed Kauffman, EVP of Legal and Business Affairs who clearly was signing bad deals on licensed products, not factoring in the changes in the business and being more critical with financial terms with partners. uDraw by itself cannot possibly explain the companies poor financial health. It is a combination of that product and a string of bad licensed deals that the company took on against better judgement. While Brain Farrell would logically be the final decisionmaker for deals, Kauffman is either unpersuasive in his arguments to not do them or supported them. Either situation equates to another example of poor staffing choices by the CEO. uDraw was failure and the only people to blame are the people listed above. THQ and its current financial situation is also their responsibility. And they were paid around $4.5 million dollars for their poor decisions. If there is any doubt we would recommend talking to current and former staff to get the straight story. Don’t read this note as bitterness on their part, but more as long overdue truth. So, Board, it is time. Passed time for you to act and passed time for you to do something about the mismanagement that has gone on for too many years. We’ve watched the stock from the outside and read the comments and the reason why the company is valued so low despite its sales is because of this underqualified management team. Board it is time for you to act before your names are added to the list above of things that must change. Sincerely, The Formerly Mismanaged

[XANDER CAGE]

So, Board, it is time. Passed time for you to act and passed time for you to do something

It's a doggy dog world.

[blame space]

shocking

[THE NO LIFE KING]

[lordfroakie]

Old Retro all over again!

[speculawyer]

This Board has allowed the Brian Farrell, the CEO, the ongoing ability to take a cash-rich profitable company and drive it from a $30 share price down to around $.70 without acting despite numerous mistakes that even for those lacking business training, could see were errors. Even without glaring mistakes how can the same CEO stay in charge after a 99% share price loss?

Corporate governance is pretty weak in the USA.

[AngelSoldier]

Would be awesome if these demands were actually met.

Unfortunately they will not be.

[Lyphen]

That's the shareholder's decision to make, and they seem like they're comfortable with just ignoring whatever THQ does with their investment.

[saunderez]

Sounds like how I imagined the company must be run so no surprises there. They're sitting on so many profitable franchises but continue to piss it all up against the wall.

That's the shareholder's decision to make, and they seem like they're comfortable with just ignoring whatever THQ does with their investment.

I bet none of the current shareholders were around when the shares were still trading high. Otherwise I can't imagine they're happy with the amount of money they've lost.

[SolidSnakex]

Anyone involved in the uDraw decision should be out. What exactly made them think that PS3 and 360 gamers wanted that?

[saunderez]

Anyone involved in the uDraw decision should be out. What exactly made them think that PS3 and 360 gamers wanted that?

In total agreement. I'm also after the scalp of whoever decided that a Season Pass for a game doesn't include ALL content for it. Saint's Row The Third and it's first DLC pack has basically sworn me off buying a Season Pass for any game ever.

[Open Source]

Wow, I hope English is this person's second language.

Brian Farrell, CEO with a 2011 salary of $1,289,558, for a lack of business intelligence or fiscal accountability.

That's not a sentence, yet it is punctuated as such.

We will be "hushed over" no longer!

[subversus]

Nirolak, you see it's not Danny who sank THQ!!

[John Harker]

I guess.... they like Danny Bilson?

he seems to have a good head on his shoulders in interviews, anyway.
Wasn't mentioned once.

[subversus]

I guess.... they like Danny Bilson? he seems to have a good head on his shoulders in interviews, anyway. Wasn't mentioned once.

yes, because it's not core games that sank the company. But they weren't able to save THQ too.

[Luigiv]

It's a doggy dog world.

Not sure if this is meant to be a joke or if you just got the phrase "dog eat dog" wrong.

[Wallach]

Not sure if this is meant to be a joke or if you just got the phrase "dog eat dog" wrong.

Want a lol smiley real bad right now.

[Grinchy]

Not sure if this is meant to be a joke or if you just got the phrase "dog eat dog" wrong.

Look at the sentence he's quoting.

[ConradCervantes]

Not sure if this is meant to be a joke or if you just got the phrase "dog eat dog" wrong.

So, Board, it is time. Passed time for you to act and passed time for you to do something

.

[VanillaCakeIsBurning]

Executives ruining lives and being rewarded for it? Sounds familiar.

[Luigiv]

.

Oh right. missed that.

[Ignis Fatuus]

Old Retro all over again!

So Nintendo will buy them and make them awesome?

[JoeTheBlow]

Sounds like a typical corporate to me.
If you keep thinking about this shit you'll be stressed so much life, and the world, seems like a nightmare. Best just clock on, do your shit, go home.
Of course thats what those below the CEO did which is why they are in the shit, but hey, thats life in corporate.
Say yes all the time and you keep your job longer than those who speak up and try to save the company.

[jooey]

Is this an ESL final?

[saunderez]

Not sure if this is meant to be a joke or if you just got the phrase "dog eat dog" wrong.

I'm guessing it was a Modern Family reference. Though I'm sure that's not the first time that particular joke has been used.

[Yo Gotti]

They might be a little too late.

[Ravidrath]

I guess.... they like Danny Bilson? he seems to have a good head on his shoulders in interviews, anyway. Wasn't mentioned once.

Bilson isn't perfect, but he's a force for good there.

He's trying to create new IP and make THQ a value-added company, while much of the organization is devoted to pumping out licensed garbage.

[freddy]

It's passed past.

[legend166]

That reads like it was written in another language and translated through Babelfish.

[Vilam]

Danny Bilson is a good guy and doesn't deserve a target on his back.

The letter as a whole is decent, but it doesn't do enough to point a finger at the completely useless marketing department at THQ. They've either never had the budget or the ideas to properly market a game... I suspect a combination of the two. THQ has good games, it just that they get almost no visibility.

[NHale]

Danny Bilson is a good guy and doesn't deserve a target on his back. The letter as a whole is decent, but it doesn't do enough to point a finger at the completely useless marketing department at THQ. They've either never had the budget or the ideas to properly market a game... I suspect a combination of the two. THQ has good games, it just that they get almost no visibility.

Isn't Danny responsible for Red Faction: Armageddon and Homefront? Core games are not the biggest problem for THQ but they are still a problem.

[Terrell]

No more You Don't Know Jack DLC then? :(

[ruttyboy]

In total agreement. I'm also after the scalp of whoever decided that a Season Pass for a game doesn't include ALL content for it. Saint's Row The Third and it's first DLC pack has basically sworn me off buying a Season Pass for any game ever.

Say what? Could you explain that a little?

[Fersis]

First time i heard about uDraw... i would have guess that its an Ubisoft product.
So... what is uDraw?

[THE NO LIFE KING]

First time i heard about uDraw... i would have guess that its an Ubisoft product. So... what is uDraw?

It's a game where you draw. C'mon son!

I have no fucking idea!

[Stumpokapow]

First time i heard about uDraw... i would have guess that its an Ubisoft product. So... what is uDraw?

It's a tablet which was released for Wii in 2010. It's not really all that great. It had a handful of software titles. It sold a few million. There was a Mario Paint style art game, there was Pictionary, there was a platformer called Dood's Big Adventure, I think there was a Spongebob game. They took that tablet, shined it up a little bit, and released it with even less software for the PS3/360 in 2011. It bombed, causing THQ to suffer a massive loss and turn around and axe the entire division.

[Fersis]

It's a tablet which was released for Wii in 2010. It's not really all that great. It had a handful of software titles. It sold a few million. They took that tablet, shined it up a little bit, and released it with even less software for the PS3/360 in 2011. It bombed, causing THQ to suffer a massive loss and turn around and axe the entire division.

So like the Mario Paint thing but with a tablet. Thanks for the info.

Also.. is that you in your avatar? I thought you were way older. ;)

[Criminal Upper]

First time i heard about uDraw... i would have guess that its an Ubisoft product. So... what is uDraw?

It's just a drawining tablet compatible with a number of games. The Wii version sold very well, but instead of focusing on that, THQ rushed out 360 and PS3 versions that completely bombed at retail a few months later.

[Stumpokapow]

Also.. is that you in your avatar? I thought you were way older. ;)

Yes, that's me. No, I'm not a geezer. ;)

[Fersis]

Yes, that's me. No, I'm not a geezer. ;)

Please tell youre British at least.

Stumpokapow mental image == Michael Caine

[hardcastlemccormick]

I have a feeling that these allegations could be leveled at most game developers, past and present.

[Riposte]

Pretty sure this is a sabotage attempt by Asian investors to make the company easier to buy. Unfortunately, they relied on cheap translating software to get their message across.

[LiquidMetal14]

I have a feeling that these allegations could be leveled at most game developers, past and present.

It's a cut throat business. I know these companies run things legit and tight but I know there has to be some wrong doing because an employee looks a certain way or to make way for someone that the company favors more. This happens in 3 fields I've worked in. It's everywhere and unfair but unfortunately that's how this world works

It's not like most companies don't care for their employees but sometimes within the ranks (and the stuff the higher ups can't see) there is some unfair and biased treatment.

[Stumpokapow]

Please tell youre British at least.

Half-British, half-Canadian. No goofy old man Michael Caine accent though.

[ArjanN]

I have a feeling that these allegations could be leveled at most game developers, past and present.

Most companies really.

[TheExodu5]

I thought saying "it's passed the time to do anything" was the right way of saying it...not "it's past time to do anything"?

Half-British, half-Canadian. No goofy old man Michael Caine accent though.

You're from Newfoundland. Goofy accent by default.

[excaliburps]

Hate to say it, but I agree with the sentiment that the letter was poorly worded. I mean, it reads like someone who wrote this and English wasn't their first language and/or it ran through a language translation system.

Now that I have that out of the way, I have to say, it does make sense. It seems like THQ is mired somewhere during the "Wii era." Back when casual games, etc. were the hot sellers.

Of course, their most recent attempts at mainstream games also being a bust also contributes to this a lot. Homefront, latest Red Faction, etc. being big factors. Heck, the mere fact that they released Saints Row 3 during the very busy holiday season against BF3, MW3, Skyrim, Akrham City, Uncharted 3, etc. was a bit of a dunce move.

The big question is, can they bounce back? Their latest "big" IP coming up is UFC Undisputed 3. If that doesn't sell, what then?

I can imagine them lowering sales forecasts for Homefront 2 and its ilk. It's good they're focusing on core games more but I hope it pays off.

I hate to see a publisher/company close. Maybe an exec-reshuffling is just what they need?

They still have Darksiders, Homefront, Saints Row and a slew of other IPs that should net them some pretty coin - that is, if they market them well and the products themselves are up to snuff.

[Mael]

It's a tablet which was released for Wii in 2010. It's not really all that great. It had a handful of software titles. It sold a few million. There was a Mario Paint style art game, there was Pictionary, there was a platformer called Dood's Big Adventure, I think there was a Spongebob game. They took that tablet, shined it up a little bit, and released it with even less software for the PS3/360 in 2011. It bombed, causing THQ to suffer a massive loss and turn around and axe the entire division.

OMG they're even dumber than I thought!
It's like they didn't understand at all what was going on

[schragnasher]

How about you guys tell Relic to make a new awesome space strategy title, call it "Someworld 3" and make some profit to stay in business.

Hell call it battlefleet gothic and make a boat load of money.

[Kum0]

Now imagine how people at Atari, Acclaim, Midway and Ocean Software felt in the 90's.

THQ could be going down this route... or could shrink operations and focus on what they do best. Although the mail is quite.... enlightening it is not surprising, as many company run like this and it is their accountability to equate risk.