We’ve known about THQ’s troubling financial situation for a few months now. The uDraw Tablet, and other entries in the youth and casual markets, have cost the company approximately $100 million in unrealized sales. According to the investor call yesterday, this is split between $20 million in discounted tablets sold and a whopping $80 million worth of the devices (1.4 million units) sitting in warehouses.
In response to this huge misstep, the company has decided to refocus on the core market. Properties like Saints Row: The Third, the WWE franchise and the upcoming UFC Undisputed 3 should have made 2011-2012 a banner year for the company. Instead, they’ve laid off 240 administrative employees this week, and CEO Brian Farrell took a 50% pay cut. This reduces his salary to a “mere” $359,250. He also reduced his takeaway should he step down, by 66%.
In further news, THQ submitted five separate confidential filings to the SEC. These are significant because the secretive nature indicates that there might damning information contained within. If made public, this could do serious harm to the firm’s attempt to right itself. THQ is currently under threat of being delisted by NASDAQ and, while the contents very well might be harmless, the company is, no doubt, being very careful about any and all information that might cast even the slightest negative light on chances for recovery.
It is our sincere hope that THQ does successfully refocus its efforts. It would be a shame if the Saints Row, Darksiders and Space Marine series were put on indefinite hold while a new home was found for Volition, Vigil Games and Relic Entertainment, among others.