THQ market value, once $2 billion, dips below $35 million
THQ Inc., once one of the top five video game publishers in the world, has seen its market value plunge from $2 billion in 2007 to just $35 million.
THQ's shares, which traded above $34 a share when the company was riding high, closed at 51 cents on Thursday.
The Aguora Hills company's fortunes have soured after a series of big bets stumbled in the market -- the latest being uDraw, a drawing game that came with its own tablet controller. Last year, THQ said that disappointing sales of uDraw would take a 25% bite out of the company's projected end-of-year revenue.
THQ then announced in January that it would quit making licensed console games for kids -- once a staple of the company -- leading to several rounds of layoffs. In addition, THQ dropped its licenses with Walt Disney Co.'s Pixar Animation Studios, Viacom Inc.'s Nickelodeon and Mattel Inc.
Wanda Meloni, principal analyst with M2Research, noted in a blog post on Gaming Business Review that the market for kids' games hasn't evaporated. It's just that kids are no longer confining their game sessions to consoles, where THQ focused its development.
"To be clear, there is a market for kids' games, only it is becoming more and more platform agnostic," Meloni noted, citing Activision Blizzard Inc.’s success with Skylanders Spyro’s Adventure, Angry Birds and Minecraft -- all of which either can be played on devices other than consoles or, in the case of Skylanders, have ties to physical toys.
Meloni also wrote that THQ has closed six development studios in the past year, leaving five remaining studios -- three in the U.S. in San Diego, Austin, Texas, and Champaign, Ill., and two in Canada in Vancouver and Montreal.
THQ spokeswoman Angela Emery declined to comment on the company's stock performance, saying, “We look forward to addressing our overall business in our earnings report coming up."
-- Alex Pham
Photo: THQ Chief Executive Brian Farrell. Credit: Anne Cusack / Los Angeles Times