THQ delays release of three games
CHAMPAIGN — Volition Inc.'s parent company this week pushed back the release of three video games and said it will consider "strategic and financing alternatives" for raising more capital.
California-based THQ Inc. also said it will stop providing guidance on expectations for future sales and earnings. It has already withdrawn guidance it's given for sales and earnings in the current fiscal year, which ends next March.
"Clearly, THQ faces a number of opportunities and challenges," THQ Chairman and CEO Brian Farrell said, announcing results for the quarter that ended Sept. 30.
Specifically, the company faces challenges "operating with limited capital resources in the highly competitive market for games."
THQ had planned to release "South Park: The Stick of Truth" on March 5, but now expects to release it early in the fiscal year that begins April 1.
Two other games, "Company of Heroes 2" and "Metro: Last Light" will now ship in March, later than initially planned.
None of those titles comes from Volition, the THQ-owned video game studio in Champaign. But a sequel to Volition's "Saints Row: The Third" is still in the pipeline.
THQ President Jason Rubin, who took that job last year, said he was pushing back the three releases to make sure the games are "of the highest possible quality."
"Experience told me that the games needed additional development time to be market-ready," he said.
Releasing those games without extra time for polish "would lead to underperformance that could in turn lead to future additional capital shortfalls," he said.
Rubin said extending development schedules will have financial implications. But following a course that generates the highest-quality games will lead to long-term success, he said.
THQ said it has hired Centerview Partners to help it evaluate ways to improve liquidity, including raising more capital.
Centerview will also help THQ determine how to bring its games to market at the most advantageous times and how to address $100 million in convertible senior notes due in August 2014.
THQ said it won't disclose developments regarding the alternatives until its board approves or completes a transaction or otherwise decides to make a disclosure.
The company reported this week a net loss of $21 million for the quarter that ended Sept. 30. That was an improvement from the $92.4 million net loss it had during the same quarter a year earlier.
Net sales for the most recent quarter were $107.4 million, down from net sales of $146 million for the comparable quarter a year earlier.
About 81 percent of THQ's sales were games for consoles, up from 68 percent a year earlier. The remainder were games for handheld devices and PCs.
Most games sold were for the Microsoft Xbox 360 (41.6 percent of sales) and the Sony PlayStation 3 (39 percent of sales).
Both consoles increased their share from a year earlier, when they had 30.2 percent and 23.5 percent of sales, respectively.