THQ bankruptcy auction closes; video game rivals pick up assets
THQ? RIP.
The Agoura Hills video game publisher that only five years ago had a market value of more than $2 billion sold most of its assets at a bankruptcy auction that closed on Tuesday.
Games in development and production studios owned by THQ were bought by a variety of competitors for a total of $72 million, according to documents filed in U.S. Bankruptcy Court in Delaware. That exceeded a “stalking horse” bid THQ had from private investment firm Clearlake Capital Group, which offered to take the entire company private for $60 million.
Founded in 1989 as a toy company, THQ grew to become a premier maker of kids’ games based on Hollywood licenses, such as Pixar Animation movies and Nickelodeon television shows. It also profited from games based on the WWE wrestling brand.
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But in recent years, as the market for licensed children’s games began to shrink, THQ struggled. It attempted without success to compete with industry heavyweights by releasing costly shooter games aimed at young men. Along the way it had several notable flops, including the uDraw gaming peripheral, that sapped the company of cash and left it without the resources to continue operating. THQ filed for Chapter 11 bankruptcy protection in December.
Shares of THQ, which had more than 1,000 employees just two years ago, fell from a high of $341.70 in 2007 to 36 cents the day it entered bankruptcy.
The new owners of its assets include an array of competitors. Japanese gaming company Sega Corp. paid $26.6 million for the military franchise “Company of Heroes” and its developer Relic Entertainment. European publisher Koch Media paid $22.2 million for the “Grand Theft Auto” parody “Saints Row,” THQ’s most popular game series in recent years, and “Saints Row” developer Volition Inc., as well as $5.9 million for the science-fiction game series “Metro.”
Take-Two Interactive paid $10.9 million for the upcoming action game “Evolve.” Ubisoft paid $3.3 million to release an upcoming game based on the Comedy Central series “South Park,” plus $2.5 million for a studio in Montreal. Developer Crytek paid $544,218 to take control of the action franchise “Homefront.”
There were no buyers for THQ’s publishing business or developer Vigil Games, a Texas-based subsidiary.
Staffers at both will lose their jobs this week, Chief Executive Brian Farrell and President Jason Rubin said in a letter to employees, which was posted on the gaming news website Polygon. A small number of people will remain at the Agoura Hills headquarters to wind down operations.
Farrell has been with THQ since 1991 and was named CEO in 1995, overseeing the company’s growth and its downfall. Rubin joined last year in an attempt to revive the company.
“The work that you all have done as part of the THQ family is imaginative, creative, artistic and highly valued by our loyal gamers,” the duo wrote. “We are proud of what we have accomplished despite today’s outcome.”
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