THQ
From Invertopedia, the encyclopedia of how things fail
Entry 136. An analysis built from the public record, not an insider account. Spot an error? Tell us.
THQ was a video game maker[3]. It lost $239.9 million in the fiscal year ending March 31, 2012, even though sales rose to $830.8 million[1][2]. It filed for Chapter 11 in December 2012[3][4], and in January 2013 its studios and games were sold off, with asset sales raising $72 million[5].
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What happened
| May 2012 | THQ reports a $239.9 million net loss, up from $136.1 million the year before, and says it has sold 84 percent of the uDraw tablets it shipped.[1][2] |
|---|---|
| Dec 2012 | THQ files for Chapter 11. Clearlake Capital offers about $60 million, including a $10 million note for creditors, and Wells Fargo and Clearlake offer about $37.5 million of financing. THQ's shares are down 84 percent on the year.[3] |
| Jan 2013 | The court rejects selling the company whole and orders broader bidding. The studios and games are sold separately.[5] |
| Jan 2013 | Asset sales raise $72 million. Nobody bids for Vigil Games, maker of Darksiders, and the studio is shut down.[5] |
The kill shot
THQ put its money into a kids' drawing tablet and a debt load it could not carry, and the games that were meant to save it came too late.
The inversion
Do not make the same bet bigger than the company can survive losing. A hardware accessory that sells on one console is not proof it will sell on two more.
References
- ^ “THQ reports $239.9m net loss for FY2012”. MCV/Develop, May 16, 2012. Fiscal 2012 sales, the net loss and the uDraw sell-through.
- ^ “THQ sees net loss of $239.9 million, still in business”. Engadget, May 15, 2012. The $239.9 million loss for the year ending March 31, 2012 against $136.1 million the year before.
- ^ “THQ Files for Bankruptcy”. Animation World Network. The Chapter 11 filing, the Clearlake offer, the financing and the share price fall.
- ^ “THQ”. Wikipedia. The December 2012 filing month and the product lines.
- ^ “THQ bids farewell after raising $72M in asset sales”. GamesBeat. The $72 million raised, the buyers, the court-ordered broader bidding, Vigil Games and the causes.
Categories: Games · Publisher · Collapsed in 2012 · Cause of death: bad bet and debt · From the public record