THQ closes 2 studios, sheds 200 jobs
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THQ Inc., following a disappointing financial quarter, on Tuesday said it will shutter two video game development studios in Australia and trim back another in Phoenix.
The move eliminates 200 positions, roughly 12% of the Agoura Hills company’s workforce.
The cuts follow the company’s announcement in July that sales of two major releases, Red Faction: Armageddon and MX vs. ATV, fell far short of expectations. As a result, the company reported a net loss of $38.4 million on sales of $195.2 million in the quarter ended June 30. It had lost $30.1 million, or 44 cents a share, on $149.4 million in revenue a year earlier.
At the time, THQ Chief Executive Brian Farrell said the company would no longer develop additional titles for its Red Faction franchise, hinting at further company restructuring.
On Tuesday, THQ said it also would discontinue the MX motocross games. The most recent MX title, released in May, had sold fewer than 40,000 copies in the U.S. as of the end of June, according to NPD Group.
In addition, THQ said it has canceled two unannounced titles, one based on a movie license and another based on a children’s entertainment license.
‘We are making shifts to reduce movie-based and licensed kids’ video games in our portfolio, which underscores our strategy to move away from games that will not generate strong profits in the future,’ Farrell said in a statement.
Instead, the company will focus its resources on online and digitally distributed games such as its upcoming Margaritaville, a social game on Facebook, and hard-core game franchises such as Saints Row.
-- Alex Pham