Archive for April, 2012

Originally published on on April 10, 2012.

The past six months haven’t been kind to THQ.

While their stock prices have declined steadily for the past two years, things took a turn for the dreadful last fall when the company announced that it was killing the uDraw tablet. That left over a million units ensconsed in a warehouse, worthless and doomed to a desert hole next to the Atari 2600’s E.T. cartridges. In combination with the announcement that the publisher was withdrawing from the kids game genre, the news caused a precipitous plunge that started the publisher on the road to a letter no publicly traded company wants to receive.

In January of 2012, THQ received a delisting notice from NASDAQ for trading below the minimum threshold of $1.00 for 30 days. In order to recover, the publisher’s stock must trade above $.99 for a minimum of 10 consecutive business days before July 23, 2012. If they don’t comply, they wouldn’t be the first in the industry. Atari was delisted, bought out by Infogrames, who then reincorporated as Atari, S.A. in 2009. While the company survived, they have yet to return to their former glory. Delisting isn’t a death sentence, but the results typically aren’t pretty.

Since the announcement of the Warhammer 40,000: Dark Millennium “shift” from MMO to single-player/multi-player title, the company’s stock has slid from $.63 per share to $.50 (as of this writing): a 20% drop. One of the ways that the company can pull out if prices don’t rise naturally is a reverse stock split. However, if the price drops any further, it will have to be more than a 2:1 reverse split in order to trade above $.99 per share. While things look bleak, Executive Vice President for Core Games, Danny Bilson, is optimistic. We had the chance to speak with him about the company’s upcoming titles, the tragic layoffs at Vigil Games and Relic Entertainment and how THQ is setting themselves up to become stronger than ever.

Michael Futter: First, thank you for taking the time to speak with us, I know you’re extremely busy.

Danny Bilson: Yeah, it’s a busy time.

MF: I’m sure. My first question is, at the end of January, THQ received a delisting notice from NASDAQ. You have until July 23 to bring the company back into compliance (10 consecutive days trading above $.99). Since the announcement about the Warhammer MMO [Dark Millennium] “shifting,” stocks are down as of right now about $.13, which amounts to 20%. They are trading right now at $.50. How are you guys going to pull out of this decline?

DB: With our portfolio that we have been working really hard on that rolls out some, what I think, are some great games over the next three years. Absolutely. I think that there is no concern around here about delisting. There are a lot of ways to avoid that, but the best way is to ship great games and to sell them well.

MF: Between now and the July 23 deadline, what is scheduled to release? I know that Darksiders II is currently scheduled for June 26. Is that going to make the June 26 ship date?

THQ PR REP: The two things don’t have anything to do with each other. Shipping the product doesn’t change anything that we’re doing to deal with NASDAQ.

MF: There’s a reaction from the investing community about a critically acclaimed game, though. So, the question is, will Darksiders II still ship on June 26?

THQ PR REP: Honestly, I can’t confirm that right now. The team is actually on the road. I can get back to you.

DB: Darksiders II is looking really, really good. It’s a huge game. It looks like… I don’t want to give the exact amount of hours of gameplay… but it’s a very, very lengthy and involved campaign. We’re going to give that team everything they need to make it as good as it can be.

MF: So there is a chance for a delay?

DB: We haven’t announced anything… but the team is working really, really hard. We’re not going to ship it before it’s done.

MF: What prompted that question is that with the announcement about the Warhammer MMO, based on the information I could find, it was about 40-50% of Vigil Games’ workforce that was cut.

DB: The workforce was reduced and the people that… of course, whenever a studio does that, they will retain the best people and the best talent, no matter what team they were on. The team is still… it’s a pretty large team in there right now. Close to 100 people.

MF: If they retained the best people, were there people on the existing Darksiders II team that were cut to be replaced with people who were on the Warhammer MMO team?

DB: There are. There are. A lot of that was preserving the most senior and experienced talent in the studio. Honestly, no one who was on any critical path on Darksiders was let go, and no one was let go before they finished their tasks on Darksiders. There’s absolutely no compromise on the Darksiders product whatsoever. That was a high priority for us.


Read on for our discussion about the Warhammer 40,000: Dark Millennium MMO “shift”