THQ file for Chapter 11 bankruptcy

As dramatic as that headline sounds, it's not as bad as you might think.

Everyone and their dog knows publisher THQ haven’t been entirely financially comfortable for a while despite the success of games like Saints Row: The Third. More recently Darksiders 2 failed to meet the company’s sales expectations despite being the best-selling game of August 2012 in the US. As such it’s been a painfully slow and seemingly inexorable downward spiral to today’s announcement that THQ has filed for Chapter 11 bankruptcy in Delaware, after recent announcements that South Park: The Stick of Truth and Metro: Last Light would be delayed until next year.

THQ’s assets are to be snapped up by a so-called “stalking horse bidder” (a term for the lead bidder in a bankruptcy sale) called Clearlake Capital Group, who have offered $60 million for THQ’s four studios and associated games in development. Clearlake are also stumping up a whopping $10 million to appease THQ’s creditors. Before you all start prematurely mourning the death of a decent South Park game or Saints Row 4, it’s important to note here that bankruptcy isn’t a binary process in the USA and comes in different forms, or “chapters.” Some like Chapter 7 are the “worse” kind of bankruptcy used for winding a company up quickly and liquidating its assets ASAP. Chapter 11 on the other hand is a stay of execution, allowing a company to continue functioning while they restructure, renegotiate debts and streamline its operations.

So don’t wail, gnash your teeth and tear at your clothes just yet. It’s certainly not a good time for THQ or its employees but it’s not necessarily the end of the world either, and is a lot better than defaulting on their debts likes they almost did back in January. Unfortunately there’s no guarantee Clearlake won’t decide to gut THQ anyway and sell its entrails to the nearest hungry corporate jackal as WB did to Midway back in 2009. Unlike Midway however THQ games are still popular, still of a high quality (barring Homefront) and more importantly, popular, as demonstrated by the success of the recent Humble THQ Bundle.

Which countless people took to soapboxes to complain about, arguing that the “purity” of Humble Bundle was forever torn from its indie roots and sullied. Ignorant of the also-recent Humble eBook Bundle featuring books from such obscure authors as Neil Gaiman and Cory Doctorow, and the fact you could choose exactly who your THQ bundle money went to right down to the penny, with 100% of your contribution going to charity if you so desired. Say what you want about the THQ bundle but I thought it gave people a great and superbly affordable opportunity to get their hands on a bunch of cool triple-A games. While the $5 million dollars it raised was only a drop in the ocean of THQ’s debt it will go a long way to persuading investors to keep THQ going.

And I bloody hope they do. THQ has been perhaps the only big triple-A developer (bar Valve perhaps) willing to take such big gambles on genuinely new IP, and in recent years I’ve enjoyed nearly all of its published games. Particularly the Warhammer 40K RTS games, Space Marine, Darksiders 2 and lately Saints Row: The Third. It’s just such a damn shame that this willingness to take risks hasn’t translated into commercial success for them. THQ President Jason Rubin has since taken to Twitter to reassure fans that Metro: Last Light, South Park, Company of Heroes and Saints Row 4 are still in development. Unfortunately so is a sequel to Homefront: you might want to rethink that one, Jason.

In short it’s a pretty grim turn of events for THQ so close to Christmas, and I sincerely hope things work out for the best for it and its studios. The industry would be a less-colourful and crazy place without them.

Source: Wall Street Journal

Matt McDermott

About Matt McDermott

Matt is the irresponsible degenerate behind bitscreed.com.