It’s not good times over at THQ headquarters, which expected to spend today’s quarterly earnings all pumping its fists about the great sales of WWE 12 and Saints Row: The Third, and instead had to explain how uDraw turned into a monstrously bad bet for it.
THQ is sitting on no less than 1.4 million unsold uDraw tablets. The success of uDraw on Wii convinced THQ it could see similar results on Xbox 360 and PlayStation 3. That wasn’t the case.
“Unfortunately, we were wrong,” said THQ CEO Brian Farrell.
That’s an understatement.
Here are the most interesting bits I jotted down from today’s call:
- THQ lost roughly $30 million on their high-definition uDraw bet.
- Confidence was misplaced on uDraw, but it was a catalyst to “evaluate our business from top to bottom.”
- THQ has ceased production of uDraw hardware, has a plan to move the rest of the units through retail channels, but has no further plans for uDraw.
- The plan is to now “transform THQ into a smaller, more agile entertainment company.”
- Looking toward the future, it “intends to launch new franchises as future platforms are introduced.”
- Saints Row: The Third represents largest “owned IP” launch in THQ history.
- uDraw was approximately $100M below expectations.
- THQ’s quarterly earnings would have doubled without uDraw in the mix.
- THQ is going “to be a smaller company,” and next year, net sales should be “roughly half.”
- Darksiders was not marketed aggressively enough, but Darksiders 2 will “build on the quality of the experience,” and THQ hopes to elevate the brand into a “mass market event” by doubling marketing.
- Characterized Metro: Last Light as a sequel to a game that was a “high quality title that had very limited marketing,” and delaying the sequel to “fully realize the value of this hidden gem to enhance and polish the gameplay.” Also, way more marketing.
- Homefront ultimately shipped nearly 3 million copies, and sold 1 million in its first week.
- THQ said Homefront’s online consumer experience “suffered from technical issues.”
- The upcoming Warhammer 40,000: Dark Millenium Online is a game where THQ has to be “realistic about [their] resources” and is seeking a partner to work on the game with.
- uDraw was meant to be a bridge to “core to digital future” and turned to be a “plank.”
- THQ now has “very realistic expectations” (read: lower) for future sales of games.
- As for Patrice Désilets next game, he’s still in “early pre-production on his project,” and there will be more detail on that “at the right time, but he’s “pleased with progress at building the team.”
- In addition to collaborating on the MMO, Relic is “highly focused on RTS.”
- As for the future of Saints Row, Volition is “dedicated to the Saints Row franchise.”
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