THQ Cutting Core Game Development

THQ will be cutting back on the number of “core” titles it releases in response to a third quarter that saw revenues and profits take a nosedive.

In its third fiscal quarter, THQ ate a net loss of $192 million on sales of $357 million, compared to a small profit of $15.5 million over the same period last year. The company announced it would implement a plan to reduce costs by $220 million in the next fiscal year, including cuts of at least $100 million in product development. 600 jobs are also being eliminated.

Not terribly thrilling stuff, perhaps, and far from unusual in this punishing economic climate, but in response to the loss CEO Brian Farrell said the company would be cutting back on the number of games it releases, focusing on a “select number of high quality titles.” The company plans to “extend its leadership” in the fighting category through the WWE and UFC brands, improve its “kids’ business,” focus on building casual franchises and move aggressively into online gaming. “Core gamers,” on the other hand, will see fewer but, according to Farrell, better releases.

What’s interesting is the list of titles THQ includes in its list of “select” titles. Some, like Saints Row 2, are obvious choices, while WWE and UFC titles should do well enough simply by leveraging the popularity of their brands. The inclusion of 50 Cent: Blood on the Sand, on the other hand, is simply mystifying, but most noteworthy is the apparent move toward the casual and online sectors.

“With respect to the core gamer, the aggregate spending will come down,” Farrell said in a conference call with investors. “The idea is focus, focus, focus. But we will compete aggressively.. .when we launch.” He added that THQ will put “fewer core gamer titles into full production,” but that they will see far more focused development and marketing.

The company’s casual game franchises, he said, remained profitable, with Wii revenues growing 72 percent year over year. And while it’s not as though THQ has been a hardcore powerhouse in recent years, the shift even further away from that demographic is yet another telling indicator of where the money is. The only “risky” title Farrell mentioned was the upcoming Deadly Creatures, the intriguing “spider and scorpion” game for the Wii; otherwise, it’s a retreat to the safe and familiar. Better for shareholders, maybe, but not for gamers.

Source: Gamasutra