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THQ 10-K report suggests it can’t afford a flop

Monday, 11th June 2012 23:10 GMT By Debabrata Nath

THQ’s 2012 form 10-K reflects the firm’s present financial crisis, wanring that even one missed sales target could have devastating effects on the rest of the publisher’s pipeline.

The report, filed annually with the Securities and Exchange Commission, includes a detailed list of “risk factors,” and other potential problems which could come in the way of the company’s progress.

The very first item on the list reflects that THQ’s going through a tough phase.

“We have incurred operating losses during the last five fiscal years. We have restructured our business operations in order to adjust our cost structure to better align with our expected future business; however, we may continue to incur losses in the future.”

The report also discusses another serious threat: “We may require additional capital to fund our planned business operations.” In the explanation for this factor, the company notes that “We believe we have adequate resources to execute on our product plan and deliver our multi-year pipeline of games; however, there can be no assurance that we will be able to do so without additional capital.”

Should net sales or costs vary from plan, THQ “may need to defer and/or curtail currently-planned expenditures, cancel projects currently in development, and/or pursue additional funding or additional external sources of liquidity, which may not be available on financially attractive terms, if at all, to meet our cash needs.”

The report also acknowledges the fact that it may not be able to afford the failure to achieve anticipated results for even one of its products in this fiscal year.(THQ only has six new releases lined up for the current fiscal year).

“Due to this dependence on a limited number of franchises, the failure to achieve anticipated results by one or more products based on these franchises may significantly impact our business and financial results.”

Jason Rubin was recently appointed as the new President of the company after Danny Bilson decided to resign from his duties.

Thanks, Joystiq.

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7 Comments

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  1. TMRNetShark

    Just please… release South Park: The Stick of Truth and you will have your 10 million copies of the game. PLEASE

    #1 2 years ago
  2. DSB

    Translated from lawyer speak: We’re fucked, and we’re not sure we’re gonna get unfucked.

    Pretty obvious to most people at this point though.

    #2 2 years ago
  3. Hunam

    This is what happens when you don’t make Homeworld 3 :P

    #3 2 years ago
  4. Kabby

    South Park will have bugger all in sales.

    #4 2 years ago
  5. AHA-Lambda

    What do you mean ONLY 6 releases? For THQ that’s a lot and a lot of room for them to fuck up :-s

    #5 2 years ago
  6. ejams

    Well Darksiders 2 is on it’s way out soon (I believe) and even though it sounds and looks better than the first, I’m not sure there are a lot of people out there who know about it or want it casual-wise. There are a lot more core gamers looking to get their hands on it, but I can’t see it stretching past more than a couple million, if that. I hope they do though, because it looks like a solid effort and the rest of their games could be at stake

    #6 2 years ago
  7. The_Red

    One huge problem with THQ was spending insane amount of marketing money on games that screamed low / disappointing quality (Homefront and WWE reboot).

    Seriously, if either Metro 2033 or DarkSiders 1 had the insane marketing budget of Homefront, they could have sold way more than they did back then. Now, just focus on South Park RPG, Metro Last Light and DS2 and you’ll be alright as long as the games turn out decent enough.

    #7 2 years ago