South Park: The Stick of Truth, Metro: Last Light and Company of Heroes 2 have all been delayed, THQ announced during its second quarter financials report.
THQ used its financial report to announce a handful of changes to its release schedule. South Park: The Stick of Truth has been pushed back from March 5 to a vague “early fiscal 2014”. THQ’s financial year ends in March, putting The Stick of Truth’s new release in April at the earliest.
Company of Heroes 2 and Metro: Last Light have also been delayed, with both now scheduled for a March launch.
President Jason Rubin said the delays are further demonstrations of his push to ensure the highest possible quality in THQ’s line up.
“Our fourth quarter releases are the first titles that I have had the ability to materially impact, and experience told me that the games needed additional development time to be market-ready,” he said.
“I firmly believe releasing our fourth quarter titles without extra time for polish in the current environment would lead to underperformance that could in turn lead to future additional capital shortfalls. But extending development schedules in order to make the best possible titles also has financial implications. Yet there can be no doubt which path has the greatest chance of leading to the long-term success of the company. We must follow the course that generates the highest quality games, and will establish THQ as a mark of quality for the consumer.”
THQ’s upcoming slate includes a sequel to Saints Row: The Third, Homefront 2 and an unannounced game from Turtle Rock Studios.
Rubin said the publisher has ten titles in development for FY2014 and beyond, “almost all of which” are THQ-original IP rather than licensed. Further announcements regarding these mysterious titles are expected in the next few months.
By the Numbers
THQ beat its own expectations to report net revenue of $107.4 million, down from $146 million in the same quarter of 2011.
This resulted in a net loss of $21.0 million, a better result year-on-year from $92.4 million.
Darksiders 2 was definitely the star of the quarter’s release schedule, with THQ seeming pleased with its Metacritic average of 83 at launch and shipments of 1.4 million, but CEO Brian Farrell told investors that sales were “below expectations” and did not live up to its reception.
On the other hand, THQ still out-performed its internal expectations thanks to ongoing catalog sales, particularly Saints Row: The Third, which has now shipped 5 million copies worldwide, which Farrell called “a hit by any standard”.
The publisher also highlighted digital revenue, noting that at $19.1 million, digital represented close to 21% of adjusted earnings, a 34% year-on-year increase, with Farrell saying digital catalog sales had been strong.
Rubin used Darksiders 2’s low sales as an argument in favour of the delays announced today, saying it shows that only “top tier games” are viable in today’s market. He said he hadn’t had the chance to significantly impact Darksiders 2’s development and release but would bring his experience to bear on upcoming slate.
Unusually, THQ closed its call without a Q&A session; the publisher is still feeling the burn of its ongoing financial difficulties, and while it has guaranteed money incoming from convertible senior notes within two years, the delay of South park beyond its current fiscal year is going to hurt.
As a result, THQ has engaged the services of Centerview Partners LLC to find “strategic and financing alternatives” to raise additional capital and will not discuss its financial situation until a decision has been made. The publisher is also suspending net sales and earnings guidance, and withdrawing its previous guidance for fiscal 2013.