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Nirolak · May 27, 2012

As expected, THQ will do a reverse stock split to try and avoid getting delisted.

GamesIndustry.biz said:
HQ plans reverse stock split
By Steve Peterson
THQ plans reverse stock split

The company will be delisted from NASDAQ July 23 unless something is done

THQ filed a notice with the SEC on May 25 for a June 29 stockholder's meeting, where THQ will ask stockholders to approve a reverse split of the company's common stock. This is a necessary step for the company to avoid the delisting of the stock from NASDAQ. The exact nature of the reverse split has yet to be determined, either 1 for 3, 1 for 5 or 1 for 10.

NASDAQ rules require stocks to have a value greater than $1 per share in order to be listed on the exchange. THQ's stock fell under that level last year, and the company was sent a notice in January of this year that they had 180 days to bring the value above $1 per share before official delisting on July 23. Currently, the stock is trading at 61 cents per share, nowhere near the threshold value.

Regardless of the ratio chosen, the reverse split will not affect the market value of the company, which currently stands at $41.75 million, or about what it costs to develop a mid-range console game.

Source: http://www.gamesindustry.biz/articles/2012-05-26-thq-plans-reverse-stock-split

JaseC · May 27, 2012

Regardless of the ratio chosen, the reverse split will not affect the market value of the company, which currently stands at $41.75 million, or about what it costs to develop a mid-range console game.

Ice cold.

remist · May 27, 2012

So is this the beginning of the end?

MrHicks · May 27, 2012

Thq worth 40 mill?
looooool

apana · May 27, 2012

They are only worth that much, why doesn't Microsoft or somebody but them out already?

Admiral Bone to Pick · May 27, 2012

JaseC said:
Ice cold.

No wonder the industry is struggling, THQ most of all. Development costs are out of control.

Nirolak · May 27, 2012

remist said:
So is this the beginning of the end?

Well, usually a stock drops a fair bit after a reverse split, so their market cap will be quite low.

It's not a fatal blow though. That will be decided by how their titles perform this fiscal year, since they need to generate enough money to survive until Saints Row 4 releases.

InertiaXr · May 27, 2012

remist said:
So is this the beginning of the end?

I'd say that probably started a while ago.

I don't really follow the stock market, has a reverse split as big as 1 for 10 ever happened? I can't think of any reason to really do that besides being in THQ's situation...

apana said:
They are only worth that much, why doesn't Microsoft or somebody but them out already?

Presumably they have some pretty big debts you'd have to take on as well.

magash · May 27, 2012

Nirolak do you know how much total liability THQ is carrying?

JaseC · May 27, 2012

Mr. Serious Business said:
No wonder the industry is struggling, THQ most of all. Development costs are out of control.

The phrasing is a bit off, haha. If it read "develop and market", it'd make more sense.

Ignis Fatuus · May 27, 2012

Mr. Serious Business said:
No wonder the industry is struggling, THQ most of all. Development costs are out of control.

That's not why THQ is struggling though.

outunderthestars · May 27, 2012

apana said:
They are only worth that much, why doesn't Microsoft or somebody but them out already?

What do they have that is worth paying that much for? Besides, they'll be able to buy the remains of the company for THQ goes under, without having to acquire any of the company's debt...

Plinko · May 27, 2012

Ignis Fatuus said:
That's not why THQ is struggling though.

True, but it isn't helping.

Linkhero1 · May 27, 2012

Does this mean they will last a bit longer than everyone's expecting?

Admiral Bone to Pick · May 27, 2012

Ignis Fatuus said:
That's not why THQ is struggling though.

Enlighten me then.

legacyzero · May 27, 2012

Damn that sucks. As long as it doesn't affect Saints Row and Metro: Last Light.

A Human Becoming · May 27, 2012

Mr. Serious Business said:
Enlighten me then.

From my understanding it was the 360 and PS3 versions of uDraw that put the nail in the coffin.

riceandbeans · May 27, 2012

So this means Devil's Third is.... ?

legacyzero · May 27, 2012

riceandbeans said:
So this means Devil's Third is.... ?

...In trouble. Yes.

I hope it gets picked up though. It's an interesting concept.

Perhaps EA?

JaseC · May 27, 2012

riceandbeans said:
So this means Devil's Third is.... ?

THQ will be dropping it.

A Human Becoming · May 27, 2012

riceandbeans said:
So this means Devil's Third is.... ?

THQ has or is in the process of selling it off.
EDIT: Beaten.

maquiladora · May 27, 2012

To THQ

rdrr gnr · May 27, 2012

A Human Becoming said:
From my understanding it was the 360 and PS3 versions of uDraw that put the nail in the coffin.

Wasn't their strategy for many years to milk various licensed* franchises?

fastballspecial · May 27, 2012

Mr. Serious Business said:
Enlighten me then.

I'm fairly certain a lot of it has to do with poor licensing decisions.

TheBioLover · May 27, 2012

Let's hope Darksiders 2 can sell well.

Collider · May 27, 2012

Why is THQ struggling exactly?
I thought SR3, Darksiders, Metro 2033 all performed pretty well.

Bombadil · May 27, 2012

It costs 41 million dollars to develop a mid-range console game?

No way.

Ammish · May 27, 2012

Collider said:
Why is THQ struggling exactly?

Posters suggest it was uDraw PS3 and 360 version that caused THQ to struggle.

number47 · May 27, 2012

A Human Becoming said:
From my understanding it was the 360 and PS3 versions of uDraw that put the nail in the coffin.

THQ needs to sell seats to their board meetings.So we can know the creative genius who thought uDraw would great on the P3/360. Clearly he needs to be running the company.

Admiral Bone to Pick · May 27, 2012

fastballspecial said:
I'm fairly certain a lot of it has to do with poor licensing decisions.

But I'm not sure how these reasons contradict the problem of high development costs. If games cost much more to develop for HD consoles, then they lose much more money when they don't sell well. Seems like a lot of the problem for THQ and other publishers is that development costs are too high to fail.

JaseC · May 27, 2012

Collider said:
Why is THQ struggling exactly?
I thought SR3, Darksiders, Metro 2033 all performed pretty well.

In a word: uDraw.
In two words: Gross mismanagement.

Edit: Beaten badly.

Steverulez · May 27, 2012

Collider said:
Why is THQ struggling exactly?
I thought SR3, Darksiders, Metro 2033 all performed pretty well.

They bet big on uDraw 360/PS3 and it tanked. It was supposed to be a golden egg for them and ended up being a rotten one.

SR3 is pretty much all thats keeping them going.

SolidSnakex · May 27, 2012

Collider said:
Why is THQ struggling exactly?
I thought SR3, Darksiders, Metro 2033 all performed pretty well.

uDraw PS3/360 tanked on an epic level

"Then the million or so units that we did sell-in we had to sell at a lower price. That, coupled with software sales that are associated with uDraw being lower as well, totals about $100 million.

http://www.eurogamer.net/articles/2012-02-02-thq-details-full-extent-of-udraw-disaster

Combichristoffersen · May 27, 2012

Collider said:
Why is THQ struggling exactly?
I thought SR3, Darksiders, Metro 2033 all performed pretty well.

uDraw for PS360 was such a massive bomb it made 'Fat Man' and 'Little Boy' look like water balloons in comparison. That was basically the final nail in the coffin.

Nirolak · May 27, 2012

Collider said:
Why is THQ struggling exactly?
I thought SR3, Darksiders, Metro 2033 all performed pretty well.

Ammish said:
Posters suggest it was uDraw PS3 and 360 version that caused THQ to struggle.

Years of mismanagement, out of control costs, bad license deals, and poor product quality.

uDraw was really just the last in a string of that.

Averon · May 27, 2012

MuseManMike said:
Wasn't their strategy for many years to milk various tie-in franchises?

Yes. Then they moved on a "develop big AAA titles" strategy. Homefront was a result of that strategy. Needless to say that trying to compete with the EAs and Activisions of the world didn't pan out.

Stumpokapow · May 27, 2012

In light of this news and other positive news recently, I'm upping my bid for 51% control of THQ to $350. Executives, you know how to reach me if you want to talk.

Haunted · May 27, 2012

Regardless of the ratio chosen, the reverse split will not affect the market value of the company, which currently stands at $41.75 million, or about what it costs to develop a mid-range console game.

I think the windows in my room just froze up.

BibiMaghoo · May 27, 2012

outunderthestars said:
What do they have that is worth paying that much for? .

Relic & Vigil.

Other than that, IP's like Saints Row, Darksiders, Company of Heoes etc.

They also hold the licences for UFC and Warhammer 40K

Nirolak · May 27, 2012

BibiMaghoo said:
They also hold the licences for UFC and Warhammer 40K

I would be shocked if those didn't revert to their owners if THQ gets sold.

Nirolak · May 27, 2012

Bombadil said:
It costs 41 million dollars to develop a mid-range console game?

No way.

If you include the marketing and define midrange as like 2-3 million, that's not unreasonable.

Activision runs up $40-$50 million developing a CoD entry and then $150 million marketing it.

Totobeni · May 27, 2012

BibiMaghoo said:
Relic & Vigil.

Other than that, IP's like Saints Row, Darksiders, Company of Heoes etc.

They also hold the licences for UFC and Warhammer 40K

Relic and Vigil worth nothing, only Volition worth something in the entire group, they are the one studio that make stuff that sells.

SolidSnakex · May 27, 2012

BibiMaghoo said:
Relic & Vigil.

Other than that, IP's like Saints Row, Darksiders, Company of Heoes etc.

They also hold the licences for UFC and Warhammer 40K

Volition is probably their most valuable asset as far as developers go. They produce their most popular non-licensed IP (Saints Row). I'd also think that THQ Montreal (Patrice Desilets new studio) would be interesting to a lot of publishers.

BibiMaghoo · May 27, 2012

Nirolak said:
I would be shocked if those didn't revert to their owners if THQ gets sold.

True, I think they only signed the 40K one again fairly recently, although I have no idea how long the term is for.

Totobeni said:
Relic and Vigil worth nothing, only Volition worth something in the entire group, they are the one studio that make stuff that sells.

also THQ don't own Warhammer, Games Workshop does.

I did not say THQ did own Warhammer, did I ?

As for Volition, SR third did fairly well, but I'm not so sure the previous SR games did. Relic have made good games for some time, going back to the original Dawn of War games. Company of Heroes is also fairly loved, although I am unsure of sales. To say both studios are worth nothing seems like hyperbole to me.

mysticwhip · May 27, 2012

40 mil is the cost of a mid range console game,wat? didn't uncharted 1 cost like 20 mil?

Totobeni · May 27, 2012

SolidSnakex said:
Volition is probably their most valuable asset as far as developers go. They produce their most popular non-licensed IP (Saints Row). I'd also think that THQ Montreal (Patrice Desilets new studio) would be interesting to a lot of publishers.

Does that still exist?

bangai-o · May 27, 2012

high dev costs are still one of the problems they faced. I dont know why you guys are able to simoly blame Udraw and management.

Nirolak · May 27, 2012

Totobeni said:
Does that still exist?

Yeah, though I feel the value is less in Desilets and more in it being a complete Montreal studio with large tax breaks that you could throw onto whatever you like.

Ciastek3214 · May 27, 2012

Anybody got some useless 22 million $ to spare?

Joni · May 27, 2012

SolidSnakex said:
Volition is probably their most valuable asset as far as developers go. They produce their most popular non-licensed IP (Saints Row). I'd also think that THQ Montreal (Patrice Desilets new studio) would be interesting to a lot of publishers.

That is not worth any money. Companies interested can just lure away any big names tied to THQ Montreal and bring them to their own Montreal studio. New, non-announced IP isn't worth much money.

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