THQ Inc. was an Americanvideo game company based inAgoura Hills, California. It was founded in April 1990 byJack Friedman, originally inCalabasas, and became apublic company the following year through areverse merger takeover. Initially working in the toy business, it expanded into the video game business through several acquisitions before shifting its focus away from toys entirely. THQ continued its trend of acquiring companies throughout the 2000s.
After years of financial struggles, stock value drop, anddebt, THQ filed forChapter 11 bankruptcy in December 2012 and commencedliquidation of its assets the following month. Several properties wereauctioned to other companies, while the remaining staff were laid off. The "THQ" trademark was eventually acquired by developerNordic Games (which had also acquired some of THQ's auctioned-off properties) in 2014 and assumed the name "THQ Nordic" in 2016, while continuing a variety of their franchises under said name.
THQ Inc. was founded byLJN co-founderJack Friedman in April 1990.[1][2] "THQ" is aninitialism for "Toy Headquarters".[1] THQ acquired New Ventures, a division ofBroderbund, in September 1990.[3] In 1991, Trinity Acquisition Corp, aNASDAQ-listedspecial-purpose acquisition company (SPAC), agreed to acquire and merge with THQ in areverse merger takeover.[1] The deal was astock swap valued at about $33 million, with THQ's shareholders owning 51.7% of the new entity.[4] THQ's name was retained for the new company, its ticker symbol was changed to "THQI", and Friedman was named as its president.[1] THQ then acquired video game developer Black Pearl Software of Chicago in 1993.[5] Following the acquisition, THQ would use the Black Pearl Software name for their Sega games, while the Malibu Games name would be used for the Nintendo games.
THQ withdrew completely from the toy business in 1994 to focus solely on video game production.[6] Around the same time, the company entered into a deal withElectronic Arts to license five titles for various consoles.[7] Jack Friedman then left the company in 1995 to co-found the toy manufacturerJakks Pacific.[8]
At the Winter CES 1995, THQ signed an expanded deal withElectronic Arts to develop games for their 16-bit and 8-bit home consoles and handheld titles.[9] From then on, the Black Pearl Software name would be used for 8-bit and 16-bit games, while THQ introduced the Kokopeli Digital Studios brand name for their 32-bit games.[10]
In June 1998, the company entered into a ten-year 50/50 joint venture with Jakks Pacific (entitled THQ/Jakks Pacific LLC) to acquire theWWF (later WWE) video game license, previously held byAcclaim Entertainment.[12] The deal, which would begin in October 1999, would correspond with two titles per year that THQ would handle product development and sales for.[13]
In 1999, it signed a deal to publishPower Rangers video games.[14] Also that year, it signed a licensing agreement with British game developerCodemasters to bring their titles to their handheld market.[15]
In February 2000, THQ faced a class action lawsuit over a violation of federal security laws due to nondisclosure of material information.[16] In September of the same year, the company expanded its internal product development capabilities with the acquisition ofVolition located inChampaign, Illinois. Since then, THQ's internal studio system grew to eleven studios across the globe with distinct capabilities across all viable gaming platforms. Some of these studios, such asRelic Entertainment,Vigil Games,Blue Tongue Entertainment, Juice Games,Kaos Studios andVolition, worked on games for next generation consoles as well as PCs. THQ went on to acquireVigil Games in 2006.[17]
In 2000, THQ signed a deal withFox Interactive to bring five of the titles to theGame Boy Color market, such as theCroc franchise.[18] In 2001, THQ obtained an extended agreement withNickelodeon to produce video games based on their franchises, as well as computer game rights toRugrats,SpongeBob SquarePants andRocket Power and console and computer rights to other Nickelodeon shows likeJimmy Neutron: Boy Genius andThe Wild Thornberrys.[19][20] The agreement also covered games based on original intellectual properties, such asTak and the Power of Juju, with the potential that THQ would release a game first, followed by an animated cartoon on Nickelodeon.[21] In 2004, THQ signed an agreement withMGA Entertainment to publish video games based on theBratz fashion doll line.[22] Also in 2004, THQ's deal with Nickelodeon was extended.[23]
On May 10, 2007, THQ reported its highest annual sales figures and net profits ever for the fiscal year which ended on March 31. THQ's revenues reached over $1 billion. In March 2008, THQ announced the development of the world's first ever cheerleading game using theWii Balance Board.[24][25] Not long after, on November 3, 2008, the company closed five of its internal studios:Paradigm Entertainment,Mass Media Inc.,Helixe,Locomotive Games, and Sandblast Games.[26][27]In 2009, huge declines in sales prompted THQ to form a strategic plan to cut $220 million in annual costs by 2010 and invest in "fewer, better bets." Previously in 2007, THQ had a $68-million profit and $1 billion in revenue, which put it within range of their rivalActivision. Many of its big-budget games sold poorly due to theGreat Recession, despite having favorable reviews. Its hold on kids' games based on Nickelodeon television shows and Pixar movies slipped as kids turned to free online games playable on the Internet. With shares down 86% from the previous year and a market value of only $173 million, THQ had the possibility of being acquired by other companies.[28] In March 2009, THQ spun offHeavy Iron Studios andIncinerator Studios as independent companies, and announced it was looking to sellBig Huge Games. Two months later in May 2009, THQ agreed to sellBig Huge Games to38 Studios. In August 2009, THQ acquired Midway Studios San Diego for $200,000. The sale of the studio included all assets, except for theTNA Impact! video game.[29] In December 2009, following many lawsuits between the three companies, THQ signed a standalone eight-year deal with theWWE, replacing the THQ/Jakks Pacific joint-venture deal.[30]
In February 2010, THQ announced that Juice Games and Rainbow Studios would be part of a reshuffle, and would now bear the title THQ Digital Warrington andTHQ Digital Phoenix, respectively. The merger reportedly led to 60 job losses between THQ's US Rainbow studio and the UK Juice Game's studio.[31]
In August 2010, THQ unveiled theuDraw GameTablet, a $70 accessory for Nintendo'sWii console that let gamers draw and play on their television screens. The white, 9-by-7-inch peripheral houses aWii Remote on the left, with a doodle pad and tethered stylus on the right. THQ said more software for the uDraw would launch every couple of months.[32]
In January 2011, THQ sold off its THQ Wireless division to a Swedish mobile company called 24MAS.[33] On January 12, 2011, THQ unveiled its new logo.[34] In March 2011, THQ, after its gameHomefront was released, suffered a 26% stock drop. The large drop was speculated to be a result ofHomefront's poor reception.[35]On June 13, 2011, THQ announced the closure ofKaos Studios (the developer ofHomefront)[36] and THQ Digital Warrington (formerly Juice Games).[37]
On July 27, 2011, THQ announced it was dropping the long-runningRed Faction franchise. This was believed to be due to the poor reception over the latest game in the franchise,Red Faction: Armageddon.[38] In the same year on August 9, 2011, THQ announced it would shift its development focus away from licensed kids and movie-based titles by closing downTHQ Studio Australia andBlue Tongue in order to focus on "high-quality ownedIP." The company also closed down THQ Digital Phoenix (formerly Rainbow Studios), thus dropping theMX vs. ATV franchise.[39][40][41]
In November 2011, a uDraw for the PlayStation 3 and Xbox 360 was released.[42] However, it was a commercial failure,[43] and is considered one of the main causes of the financial woes that broke up the company.[44][45]
In January 2012, THQ announced that it was exiting the licensed kids game business to focus on adult core gaming, but would continue to sell previously released titles.[46] In February 2012, THQ also discontinued the uDraw GameTablet for the same reason.[47]
In May 2012, THQ reported a net loss of $239.9 million for the fiscal year ending March 31, 2012. The loss was $100 million more than the previous fiscal year's loss of $136.1 million.[48] That same month,Jason Rubin was appointed president of the company.[49]
THQ filed a notice with the SEC on May 25 for a June 29 stockholder's meeting, where THQ asked stockholders to approve a reverse split of the company's common stock.[50] On June 4, 2012, THQ announced a deal to turn over their license forUFC games toElectronic Arts (EA).[51] In July 2012, THQ reported that its stockholders had approved the 1-for-10 reverse share split of its common stock to avert a delisting from the NASDAQ.[52]
Bankruptcy and liquidation, THQ Nordic (2012–2013)
On November 13, 2012, THQ reported that they could not repay a $50 million loan fromWells Fargo, and were on the verge ofChapter 11 bankruptcy. With its stock price plummeting from early November values bordering on $3 down to $1.16 and with long-term liabilities of $250 million, THQ was forced to delay the release dates of its flagship titlesCompany of Heroes 2 andMetro: Last Light to March 2013.[53] On November 29, 2012, THQ partnered withHumble Bundle to launch the Humble THQ Bundle in an effort to raise more money.[54] By December 12, 2012, THQ sold nearly 800,000 bundles, raising around $5 million;[55] THQ President Jason Rubin also made a purchase, spending $11,050 on the bundle.[56] On December 19, 2012, just days after the Humble THQ bundle ended, THQ filed forChapter 11 bankruptcy with the intention of selling THQ and all of its assets toClearlake Capital with Centerview Partners handling the sale.[57][58] Skip Paul, a former colleague of Jason Rubin, helped orchestrate the proposedstalking horse bid from Clearlake Capital Group.[59]
On February 26, THQ announced that it would sell off its remaining properties – theDarksiders,Homeworld,Red Faction, andDestroy All Humans! franchises, as well as its licensed and original properties – in a court-approved auction which would be held from April 1 to 15, with the process completed by May.[67] Around the same time, THQ shut down the servers to the2012 remake ofNexuiz, which was developed byIllFonic.[68] In June 2013,Interplay Entertainment acquired the rights to theFreespace franchise from THQ.[69]
All of THQ's remaining franchises, including the remainder of its original IPs (aside fromHomeworld, which was acquired byGearbox Software, andDrawn to Life, acquired by505 Games) and licensed software, were auctioned toNordic Games for $4.9 million in April 2013.[70] The Nickelodeon game license was acquired byActivision.[71] This would later expire, with Nickelodeon licensing out their franchises through various smaller publishers, including Nordic.[72]
Creditors initially said the proposed sale of THQ in the bankruptcy court benefited current THQ management, including Rubin.[73] Presiding Judge Walwrath called these criticisms a "conspiracy theory" on record.[74] Creditors ultimately released THQ management, including Rubin, of any malfeasance in the company's official plan of liquidation.[75]
The liquidation of THQ also affected other studios; British developerBlitz Games Studios shut down in September 2013, citing financial difficulties. The company's CEO Philip Oliver said that the demise of THQ, who was a major client for the studio, was one of the major contributing factors to the closure.[76]
On June 12, 2014,Nordic Games announced that it had acquired the THQtrademark, allowing the studio to publish games under the THQ name.[77] In August 2016, the company was renamed THQ Nordic in an effort to better associate itself with the historic brand.[78]
^"Press release: 1995-01-04: T-HQ shows new lineup of portable video games and XBAND video game modem at 1995 Winter CES".The Free Library. January 4, 1995.
^In Re: THQ, Inc., et al., Case No. 12-13398-MFW (Bankr. Ct., D. Del.), Transcript of Hearing on January 4, 2013 (pp. 238–239); lines 24-2. A copy may be viewed at the Office of the Clerk, District of Delaware Bankruptcy Court, or by contacting Transcriber Reliable at 302-654-8080.
^"Rushware jetzt THQ" [Rushware now THQ].GamesMakrt (in German). February 12, 2002.Archived from the original on July 20, 2020. RetrievedJuly 19, 2020.
^Steininger, Stefan (January 9, 2002)."THQ forciert den Mobile Games-Markt" [THQ pushes the mobile games market].GamesMarkt (in German).Archived from the original on July 20, 2020. RetrievedJuly 19, 2020.
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