Brian-Farrell
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THQ formally drops Farrell, Rubin, executive staff
THQ's storybook is down to the final pages, following the rising action of its dropping stock, and the climax of its bankruptcy at the end of 2012 and asset sale in January. Now for the falling action: THQ formally terminated CEO Brian Farrell, President Jason Rubin and Chief Strategy Officer Jason Kay on January 30, made public in an 8-K form filed today.Earlier in February, Rubin said that THQ's failure was its own fault, and it boiled down to missteps with franchises such as uDraw, the Warhammer 40K MMO and Homefront. "THQ had every chance to survive, had it not made massive mistakes," he said.THQ's epilogue is up next, wherein we find out what all these new companies will do with its former properties.
THQ's new boss outlines the company's path to financial salvation
"For me, this is about the future," newly appointed THQ president Jason Rubin told investors during a conference call this morning. Rubin was outlining his plan for the future of THQ – a plan he hopes will take THQ from an ailing company on the fringe of the publishing world to previously untapped financial greatness. "The industry is about to change. If you look at what's happened in the PC business, if you look at what's happened in some of the other businesses out there, you see that print models and different ways of distributing and publishing games has opened up a significant amount of revenue for other companies," Rubin said.Rubin's message – wherein he partially blamed THQ's financial issues on "big incumbent players" who have a "huge advantage in keeping their top spots," such as EA and Activision – seems particularly strange considering THQ CEO Brian Farrell's repeated assertion that the publisher is focused on "core brands" such as Darksiders and Saints Row. As recently as last week, THQ was espousing its "core games" focus. "THQ realigns its focus from a maker of licensed games for broad audiences to a developer of AAA 'Core' games for multiple platforms," the press release announcing Rubin's appointment reads."Companies in a very short amount of time can go from very small to very large. Zynga's a perfect example of that," Rubin said. "I believe that this business has opportunities that are coming on the near horizon to do something very similar. And I think that the teams that we have are properly positioned and properly sized to take advantage of that opportunity." Rubin further explained his hopes for those business opportunities. "This is about looking at what THQ has, looking at what the business is gonna become in the near future, and making a real concerted attack to get in early on the new business model." What that business model will be remains to be seen. We'll be sure to put that question to Rubin when we speak with him later this week.
THQ's Danny Bilson exits as Jason Rubin takes prez spot
THQ announced this afternoon that former executive vice president of "Core Games" Danny Bilson stepped down from his position in the company, and Naughty Dog co-founder Jason Rubin is taking the position of president. Rubin will report directly to chairman and CEO Brian Farrell.Additionally, senior vice president of Core Studios Dave Davis is exiting the company. Bilson, Davis, and the "Core Games" group at THQ lead the charge in recent years on THQ's rebranding (including the logo you see above) from a licensed-game publisher to one developing and publishing what Bilson and co. considered "core" franchises (Warhammer 40K, Saints Row, and Red Faction among others). The move is especially odd considering THQ's continuing initiative to develop "AAA 'Core' games for multiple platforms."As for Rubin's appointment, that's distinctly less odd – he helped create one of the game industry's most successful development studios. "Jason's proven track record in the industry speaks for itself, and he is one of the brightest minds in the business," Farrell said of Rubin's appointment. As for Bilson, Farrell noted his "significant contributions" and thanked him.
THQ CEO Farrell takes 50% pay cut, board of directors also takes cuts
THQ is definitely experiencing some troubles related to its uDraw flop and subsequent layoffs, as evidenced by a new document filed with the Securities and Exchange Commission.President and CEO Brian Farrell will take a pay cut for the year starting February 15, which reduces his salary from $718,500 to $359,250. His salary will go back up the next year.His golden parachute has also been tailored a bit more closely, as the payment he'd receive upon departure from the company (either termination "without cause" or resignation with "good reason") has been cut from three times his highest-ever bonus to just his highest-ever bonus. This is, of course, a small sacrifice compared to the THQ employees whose salaries went from "some" to "none."The board of directors is also seeing some cuts: all the other directors have "elected" to receive 50% less cash compensation for a year effective today.
Alleged former THQ staffer sends furious note to board, press
An anonymous letter sent to media and THQ's board of directors, allegedly written by a former employee of THQ, rains fire on the company's management and, specifically, CEO Brian Farrell. The letter arrives the same day as THQ announces another strategic realignment, a little over a week after the company had to spin a major cancellation rumor and over a month after THQ's stock dropped below $1."It is to the point where having [THQ] on your resume is not a point in your favor. And that shouldn't be the case," the "Formerly Mismanaged" writes. "I'm/We're sending this note anonymously because some of us are still awaiting final checks and others know how little corporations like employees who air their dirty laundry. We feel the need to say something to combat the partial misinformation being written."The Formerly Mismanaged lays out its belief that the beginning of the end came when the cash rich company went on an acquisition spree years ago, allegedly "with no plan" -- many of those studios have since been shuttered or sold off. Then came what the accuser(s) call bad licensing deals and the most recent business miscalculation with the uDraw tablet, which caused the company to lower its fiscal outlook for the year.The scope of THQ's problems is expected to come into slightly better focus when it announces its current financial position on February 2. Wedbush Morgan Financial Analyst Michael Pachter has pointed out he believes THQ will generate a "substantial loss" at the end of its fiscal year and that "THQ is at risk of running out of cash by the June 2012 quarter."You can read the entire letter by "The Formerly Mismanaged" after the break.
THQ CEO talks up cloud gaming, plans 40 weeks of Saints Row 3 DLC
THQ CEO Brian Farrell spoke highly of cloud gaming yesterday, which should come as no surprise to anyone who's seen THQ's frequent OnLive deals, or to anyone who knew that he happened to be speaking at the Cloud Gaming USA conference. Farrell predicted that a move to discless, all-digital game distribution "will result in a lower cost for the hardware manufacturer, which will result in a lower cost to consumers and therefore a lower entry point, thus driving more mass market adoption." It's something he sees not just PC-based services, but consoles doing as well -- though he didn't really specify "cloud" there vs. just downloading games. And speaking of downloading content, Saints Row: The Third is going to have some -- a lot, actually. Farrell said that the game would be followed by roughly 40 weeks of DLC. "We totally change how we keep consumer engaged for a very long time," Farrell said. "We intend to create an online digital ecosystem that keeps them interested for a year or more." It's the same kind of approach THQ tried with MX vs. ATV Alive, except without the base game having reduced content to start -- or a reduced price. "What we found was unlike free to play, $39.99 [the budget-level price of MX vs. ATV] just wasn't low enough to drive a big enough install base to push the level of DLC we had initially hoped for." It will be interesting to see if that kind of strategy works with a game that is more complete, and fully priced.
THQ laments 'disappointing' quality in recent games
THQ's earnings release and investor call have seemed to pile on the poor Red Faction series. CEO Brian Farrell called out Armageddon's disappointing sales in the release, and announced the effective cancellation of the series in the investor call. Elsewhere in the call, he lamented the perceived quality of Armageddon and the other two most recent core games -- presumably MX vs. ATV: Alive and UFC Personal Trainer, though none are identified by name. "The last three launches we've had have been disappointing in terms of the quality," he said. "Mid-70s [in terms of Metacritic average] is not good enough, and the entire team in our core group knows that." Farrell said the core group intends to focus on putting enough time and resources into its games to ensure higher quality. He specifically referenced Saints Row: The Third, for which "We believe strongly the quality bar is there." And that's how the game's signature weapon got its new nickname, "The Quality Bar."
MX vs. ATV dubbed a noble, though not successful, experiment
In trying to reinvent itself, THQ has tried some interesting things; unfortunately, many of these experiments haven't been successful. Take, for example, MX vs. ATV Alive, the publisher's budget-priced take on the motocross mainstay. "We were trying to take some of our learnings from the free-to-play market and see if we could apply them to the console world," CEO Brian Farrell explained to investors on an earning's call today. "The idea was [...] to come out with a robust product at a $39.99 price point, build a larger install base more quickly, and then monetize that install base through rapid and large-number of DLC drops." The only problem is ... the game didn't move enough units to, in turn, move enough DLC to make the experiment a success. "The key learning there was that it was not a successful experiment," Farrell admitted. "The $39.99 price point, while good – it gave us good acceleration of sales – just wasn't enough to drive the install base to where we wanted it to be. Obviously the correlary to that, is that on a lower install base, the amount of DLC sales are not what we anticipated." Farrell blamed the "high fixed cost of goods in the current console market" for preventing the publisher from hitting a low enough price to drive meaningful DLC sales. The CEO concludes, calling the game a "noble experiment" that he thinks will have "a long shelf life at $39.99."
THQ disappointed in Red Faction performance, thinks fiscal Q3 could be its best ever
Despite the fact that net sales were up year-over-year in THQ's fiscal Q1 (which ended June 30), from $149.4 million to $195.2 million, CEO Brian Farrell still wasn't satisfied. "We are disappointed in our first quarter financial performance," he said in the earnings release. "Sales of Red Faction: Armageddon and our licensed kids titles were below our expectations, and the late release of UFC Personal Trainer also adversely impacted the quarter." Of course, that disappointment is probably due to the fact that even with increased net sales, the company came out negative, with a net loss of $38.4 million. Most of the "losses" are from "deferred revenue" -- revenue that the company isn't counting now, because it'll go toward ongoing online services for its games. However, Farrell is looking forward to a profitable Q3 (October through December) -- so profitable, in fact, that he said THQ expects it to be "the biggest third quarter, both in revenue and earnings per share, in our company's history," thanks to Saints Row: The Third, WWE 12, and the PS3/Xbox 360 versions of the uDraw tablet, all scheduled for November releases.
THQ CEO: Next-gen is 'less about technology and more about service'
"We believe Apple is going to be there, Google is going to be there," THQ head honcho Brian Farrell told an audience at today's GamesBeat conference in San Francisco. He isn't talking about this weekend's killer tech company pool party (you should come!); instead, he's talking about the next generation of game consoles. "Our view is that the next generation of consoles, if there are consoles, are going to be less about technology and more about service orientation of the gamer." Take that, technology! Apple and Google are already changing the video gaming landscape and their Apple TV and Google TV platforms have the potential to be even bigger game-changers. Though as bullish as he is on Apple and Google's mobile offerings, Farrell still sees a future for the PlayStation Vita and 3DS. "The dedicated handheld market is going to find an audience, but it isn't going to be as broad because of the competition from other operating systems. What the market is telling us, is consumers want a very quickly consumable mobile experience; it doesn't necessarily have to be deep." While THQ is still intent on making expensive plays in the AAA console gaming space, like September's Warhammer 40,000: Space Marine and November's Saint's Row The Third, it's also working on "better bite-size games," according to GamesBeat, "rather than massive titles with awesome graphics on hand-held consoles like Sony's PlayStation Vita or the Nintendo 3DS." With EA plunking down some serious cash for PopCap, one of iOS's top-earning developers, we're seeing more publishers focus on the new mobile space. Now the question is whether or not gamers have enough time and money to support that many competing mobile platforms. Sorry, Panasonic Jungle.
THQ confirms 'Metro: Last Light' as Metro 2033 sequel
Speaking this evening during an investor conference call, THQ CEO Brian Farrell confirmed that "Metro: Last Light" will be the title of the sequel to last year's gritty FPS Metro 2033. Last month, domain registrations for "Metro2033LastLight.com," "MetroLastLight.com" and "LastLightGame.com" served as evidence of an upcoming game under some permutation of that title, but THQ had yet to offer anything official about that title -- and it wasn't clear whether that related to a sequel (which has previously been known as "Metro 2034") or some kind of spinoff. The important thing, of course, is that it hasn't been titled "Unreleased FPS Project." In fact, this game will be the focus of a "first-class marketing campaign," THQ core games CEO Danny Bilson told us earlier this year.
THQ logo revamped for a new focus on 'innovation and creativity'
You know that old, silly THQ logo? The one where it looks like the letters are going high speed? That is now, officially, old and busted. As seen above, the publisher unveiled its new logo (aka "the new hotness") this morning, with company head Brian Farrell noting, "Our new logo epitomizes the change, innovation and creative growth that are the cornerstones of the new THQ." Farrell is of course speaking to the past few years of major changes at THQ, kicked off with the hiring of core games VP Danny Bilson in early 2008 and followed by several successful business choices in the subsequent years -- everything from achieving cost-cutting goals early on to brokering deals with top talent. The new logo will start making retail product appearances this February and "will be rolled out over the next few months" in other venues. Goodbye speedy THQ logo, hello crazy future-font THQ logo!
Game industry 'a lot healthier' than what NPD has indicated, THQ CEO believes
Speaking with GameSpot about his company's forthcoming releases and business strategy, THQ CEO Brian Farrell suggested that reports of the game industry's death have been greatly exaggerated. Those "reports" -- perhaps better thought of as a general perception shared by many investors, analysts, media outlets and informed consumers -- can be largely attributed to declining software sales over the past few years, as tracked by the NPD Group on a monthly basis. "I'm a big fan of NPD and we're not declaring war on them," Farrell assured, "but what we've been trying to clarify is people are looking at just NPD now, right?" While NPD is in the process of expanding the scope of its reports (and also limiting them), the group has traditionally tallied only U.S. sales of new (physical) software, in addition to those of hardware and accessories, painting an increasingly bleak picture of the industry as revenue continues to shift to other sectors. (NPD now intends to track sales data across a wide range of revenue streams, including digital and mobile platforms and social networks, not to mention used-game businesses and rentals.) "I'm not being critical of [NPD], but it's just a lot of investors or people who look at the industry and see the NPD box product sales are down," Farrell lamented, before juxtaposing that perception with THQ's point of view: "more people are playing games than ever before." "[We] as an industry need to come up with a different way to look at the industry to capture all those revenue streams," he continued. "So I think the industry is a lot healthier than just what NPD is reporting." THQ will test that apparent vitality next spring with the release of MX vs. ATV Alive, which will be budget-priced at $40 and supported by a steady stream of DLC. "You know, hopefully tens of millions of dollars will come from just that single product."
THQ: Saint's Row movie coming, will be announced next month
We've frequently been addled with this thought: Why hasn't anyone made a movie starring Keith David and a dude dressed up like a hot dog, who wander around large metropolitan areas indiscriminately shooting vehicles, buildings and people with rocket launchers? That is a movie we'd pay well over the standard ticket price to see ... and we might soon have our chance! In a recent interview with Gamasutra, THQ CEO Brian Farrell revealed that the company will announce a Saint's Row movie sometime next month. Though no details about the film were revealed, Farrell said the plan is to make sure the film and the next installment in the over-the-top crime series will release at the same time, saying "this builds our brand at no cost to us." Sure, it does -- unless the film is like, wicked bad. Like, Ballistic: Ecks vs. Sever bad. Like, Alone in the Dark bad.
THQ president talks up new $40 sales model, building a user base
THQ president Brian Farrell has some bold ideas about the future of the gaming industry's profitability. While speaking at the recent BMO Capital Markets Conference, Farrell explained, "What we're thinking about the business is we're turning it on its head a little bit," later adding, "It's not, 'how high a price can we get', but 'how many users.'" Farrell then described THQ's vision for capitalizing on that policy: As revealed in September, THQ hopes to launch the next entry into the MX vs. ATV series at a lower price point, and rely on DLC to bring in the big bucks. "When we launched [MX vs. ATV] at $59.99, we'd do some units, and then when we brought the price down to the mass market-friendly price of $39.99, it would just pop," he explained to the conference's attendees. "So the thinking this time is, let's initially launch at $39.99 ... It's a AAA title, at that price point, but then with a series of DLC so people can extend their experience." The company's strategy makes a lot more sense, now. See, before, we just thought they were dropping the MSRP because they wanted to do a nice thing for us.
Next THQ MX game coming 2012, to offer 'hybrid' budget experience with DLC
Games aren't always going to keep their $60 price tag -- at least, that's what THQ president Brian Farrell believes. Speaking at the recent "Goldman Sachs Communacopia XIX" investors conference, Farrell described the future of the industry, one that allows for more flexibly priced goods. He offered a glimpse at the future by discussing the company's next (currently unannounced) MX game. Due in fiscal 2012, the title will experiment with a "hybrid" model that combines a budget price point and extensive DLC. "What we're doing this time is coming out initially with a smaller game at a lower price point, at the $29-$39 range, and then doing a download model for different modes, different tracks, different vehicles. We call it hybrid because it's a take on the microtransaction and DLC models," he explained to investors. By offering a smaller game at a smaller price point, Farrell believes they can capture the budget gamer "no matter what." However, by adding extensive microtransaction options, gamers can buy into as much as they want. "If a person wants to spend a $100 on a game then they can do that as well." THQ's next MX game is just another example of the shifting economies within the video game industry. For example, THQ's Red Faction Battlegrounds represents yet another part of the company's experiment to diversify game pricing. EA has also been expanding its digital portfolio with its own "Project Ten Dollar" initiative. "Whether it's a take on this model or the free-to-play model, this is where our industry is going," Farrell added.
THQ's 'Kids, Family and Casual' branch revealing new project next Tuesday
If you're the least bit worried about the massive workload THQ seems to have taken on -- seriously, just look at that chart -- you may want to avert your eyes from this particular story. During the publisher's investors call earlier today, CEO Brian Farrell explained that the company "will be unveiling an innovative new product a week from tomorrow in New York," later adding "we look forward to its launch this holiday season." A representative from THQ explained that this new project is being developed by the "Kids, Family and Casual" (or K.F.C.) management branch of the studio, likely ruling out the chance that this unannounced project is that Saints Row MMO you've always dreamed of. We've contacted THQ to see if we can get any additional details about the project. Like, for instance, will it be crispy, or original? Can we assume it will be finger lickin' good? Will it come with its own secret blend of herbs and spices?
THQ looking at 'longer development cycle' for next UFC
"We thought based on the preorder trends that we saw and what we were hearing from retailers and consumers alike and we built our plans for growth in UFC this year," THQ CEO Brian Farrell said on an earnings call today. However, with 2.7 million units sold relative to last year's 2.9 million units in the same period, it's clear the sequel didn't show signs of "growth." (Was it Red Dead's fault?) After reaffirming it as "still a top franchise" Farrell told the call, "What we're thinking about – not to necessarily reinvigorate it because it's a great franchise – but as I said in my prepared remarks, we're considering a longer development cycle. 15-, 18-, 21-months between releases rather than annually." That increased development time will, ostensibly, increase product quality and, with fewer releases, increase consumer demand. That combined with the UFC training and fitness game (not to mention PSP ports), Farrell assures analysts that "We think there's a lot of growth to be had with the UFC franchise over the next several years." Farrell is quick to declare that there will be a UFC game in the next fiscal year. "We will have a UFC title in fiscal '12," he said directly. "The question is timing, as I said. Could it be 15-, 18-, 21-months? That depends on both the scope of the game, the window, and how we want to release that game. As I said in my prepared remarks, we thought maybe a 12-month cycle might be a little quick but it'll be somewhere around 18-months give or take a few months." If you consider this year's UFC Undisputed 2010 on a 12-month dev cycle, an 18-month cycle would put its successor somewhere around late November 2011, smack dab in the middle of the busy holiday shopping season. Might be a tough spot for a UFC game to fight its way out of.
THQ report: $30m Q1 loss, UFC Undisputed 2010 moves 2.7m units
While THQ may be rebounding in terms of brand and product quality, that doesn't mean it can simply take the express bus to Money Town. There's more to running a successful entertainment business than simply making well-received games. For its fiscal 2011 first quarter ended June 30, 2010, the publisher reported net sales of $149.4m driven primarily by UFC Undisputed 2010. While that sounds like a lot of scratch, that's compared with last year's sales for the quarter of $243.5m, driven by UFC 2009 Undisputed and Red Faction: Guerrilla. The earnings report explains, "No title comparable to Red Faction: Guerrilla was released during the first quarter of fiscal 2011." With sales down, losses are up, with a net loss of $30.1m for the quarter compared with a net income of $6.4m for the same period last year. So with all bets on UFC 2010 for the quarter, and despite a stronger Metacritic score, it managed to move just 2.7m units compared with 2.9m units for its predecessor last year. "We built our plans for growth in UFC this year," Farrell told investors. Though no new major titles are planned for the company's upcoming Q2 period, the remainder of the fiscal year holds releases for both Homefront and Red Faction: Armageddon, and THQ expects non-GAAP net sales "in the range of $845 million to $865 million" and "roughly breakeven" earnings for the year. The focus is very much on fiscal 2012, which includes major releases like Warhammer 40000: Space Marine and Darksiders 2. "We also delivered our most critically acclaimed E3 showing ever with a strong line-up of games in development, several of which are based on proven long-term franchises," Farrell says. "Our goal this fiscal year continues to be to position THQ for growth in fiscal 2012 and beyond."
THQ says Warhammer 40K MMO doesn't need a million subscribers
We all know game developers love to announce big numbers. A million of this, ten million of that, forty million of the other. No thanks, says THQ -- our Warhammer 40K MMO will be just fine without all that. The Warhammer 40k team is small and very experienced, so they have the advantage of skipping a lot of expensive trial-and-error, moving straight to building the game right. In a recent conference call, THQ's CEO Brian Farrell pointed to the relatively low investment cost of the Warhammer 40k MMO as the reason that they don't need to aim for huge numbers: "We don't need the kind of subscriber levels that people throw around, like a million subscribers, to make a lot of money on this title. If we get anywhere near that level, we'll be making a lot of money." Given the enthusiasm shown by fans of the title, they just might hit those numbers anyway.
