THQ is Bankrupt for Real This Time

........................

The bottom line here is that a for a ship-once AAA PC game, a 2M unit seller is marginally profitable.
In terms of real money makers, the best example of a "strategy" game that is doing huge numbers is League of Legends. LoL doesn't sell anything upfront, rather its all done through item sales. LoL (which is owned by Tencent) is doing an estimated $300-400M of revenue PER YEAR. Not one time, but each year and growing. The F2P item model can sustain itself much much longer than a ship once client sale. That's why Relic also wants to add some microtransaction elements to COH2.

Makes perfect sense to me...and were you not the poster who commenced the epic(?) thread about THQ on the previous board? Not that anything follows from that, ofc

It would be interesting to know how many CoH copies (all versions) have been sold up to this day; including all the discounts too.

The number must the quite high, that's for sure.

It's Chapter 11, which is a restructuring. We're going to be just fine, thank you for your concern, though

the rainbows and unicorns spin Rubin is trying to put on this thing is getting comical.
Rubin and Farrell are looking like pure slime at this point.

Creditors Blast Bankrupt Game Maker THQ's Sale Plan

Law360, Wilmington (January 02, 2013, 10:24 PM ET) -- Creditors of video game producer THQ Inc. asked a Delaware bankruptcy judge Wednesday to reject its bid procedures, arguing that the proposed terms for the Chapter 11 auction were crafted not to maximize value but to ensure a sale to stalking-horse bidder Clearlake Capital Group LP.

California-based THQ entered court protection Dec. 19 with a prepackaged plan envisioning a $60 million sale to private equity firm Clearlake, but an ad hoc committee of the company's noteholders claims the terms of the proposed Section 363 sale will serve to chill competitive bidding rather than promote it.

Bid procedures should promote a robust auction, the committee said, but those proposed by the debtor — including an “unjustifiably accelerated sale timeline” calling for a Jan. 9 auction, Jan. 10 sale hearing and a closing by Jan. 15 — would have the opposite effect and “appear to have been designed specifically to thwart any potential bidders from stepping forward to compete with Clearlake’s bid.”

Representing creditors holding 41 percent of the $100 million in senior notes that make up the lion's share of THQ's debt, the committee holds that a title-by-title sale of the company's video game lines would provide a greater return to investors.

The committee blasted a sale provision that would allow THQ to reject any offer that does not include substantially all of the company's assets, “notwithstanding that there is reason to believe that more value may be generated by a sale of the debtors’ assets on a 'piecemeal' basis.”

At a first-day hearing, THQ counsel Jeffrey C. Krause said the hurried sales process was made necessary by the terms of its debtor-in-possession financing package as well as the fact that the company would run out of cash by Jan. 15 even with the added financing.

The time line, while not ideal, offered the only alternative to a complete shutdown and breakup of the company, Krause said, and it would be “better to sell at these terms than be forced to liquidate.”

U.S. Trustee Roberta A. DeAngelis also took issue with the proposed bid procedures, filing a separate objection Wednesday that voiced additional concerns regarding the auction conditions.

Besides echoing the committee's concerns about the expedited schedule, the trustee said the provision requiring the first bid to top Clearlake's offer by at least $2.75 million would further restrict competition and should be removed.

“Such a sizeable initial overbid may chill bidding by discouraging potential bidders from participating in the proposed auction,” the trustee said.

The procedures also violate the local rule requiring that auctions be conducted openly with all creditors permitted to attend, the trustee said, claiming they seek to limit attendance to representatives of the qualified bidders, debtors, DIP lenders and any statutorily appointed committees.

“There does not appear to be justification for waiver of this requirement in this case,” the trustee said.

A hearing on the bid procedures and the final DIP order will be held Friday before U.S. Bankruptcy Judge Mary F. Walrath.

THQ, which designs and publishes video games for home consoles, computers and other platforms, sought court protection along with its four U.S. subsidiaries Dec. 19 citing a prolonged cash crunch made worse Nov. 7 when lender Wells Fargo Capital Finance LLC declared an event of default, which Krause said “created much bigger indirect issues.”

The company's product line includes wholly owned franchises “Saints Row” and “Company of Heroes” and its World Wrestling Entertainment games produced under a licensing agreement, and it currently is developing a game based on “South Park” set to be released in 2013, as well as a new title from the creator of the successful “Assassin's Creed” series.

The ad hoc committee is represented by Paul N. Silverstein, Jonathan I. Levine and Jeremy B. Reckmeyer of Andrews Kurth LLP.

THQ is represented by Michael R. Nestor, M. Blake Cleary and Jaime Luton Chapman of Young Conaway Stargatt & Taylor LLP and Jeffrey Krause, Jonathan Layne, Ruth Fisher, Oscar Garza and Cromwell Montgomery of Gibson Dunn & Crutcher LLP.

The case is In re: THQ Inc., case number 1:12-bk-13398, in the U.S. Bankruptcy Court for the District of Delaware.

--Editing by Richard McVay.

Lol jimmy raynor cant get enough. At least make your username something not associated with starcraft

wall of text

Oh, hello Jim.

here is hte actual link.
the problem is you need a membership to see the whole thing.

http://www.law360.com/articles/404245/creditors-blast-bankrupt-game-maker-thq-s-sale-plan

tomorrow is the big day in front of the judge though... Mary Walrath i think her name is?

Lol jimmy raynor cant get enough. At least make your username something not associated with starcraft

Jim Raynor comes from the 1991 movie "Rush"

First a AAA game on PC should cost well above $10M. ....

The bottom line here is that a for a ship-once AAA PC game, a 2M unit seller is marginally profitable.
In terms of real money makers, the best example of a "strategy" game that is doing huge numbers is League of Legends. LoL doesn't sell anything upfront, rather its all done through item sales. LoL (which is owned by Tencent) is doing an estimated $300-400M of revenue PER YEAR. Not one time, but each year and growing. The F2P item model can sustain itself much much longer than a ship once client sale. That's why Relic also wants to add some microtransaction elements to COH2.

Makes sense, as far as number averages go, but thats not the case on an industry wide level. If you account for EA, Activision and Ubisoft, the three Giants (THQ once the third one), then yes. However, many AAA games, from minor publishers or self published, can and are made at about $12 million. Psychonauts and Allods Online are such cases (Example article, however they still have proved hard to earn their bucks, thats true)

From a publisher's point of view, yes marketing costs are important,because they have to pay for them, but we are concerned on the effect it would have on the development of CoH. However, with online retailers, the publisher's importance has diminished, to the point that games such as Minecraft have slapped the industry giants into reconsidering their business models. Marketing is very important, but it is not THE only factor. I once read this article on a magazine stating that about 60% of the money spent of marketing, is wasted/ineffective.

Which brings us to F2P. IMHO, it wont last logner than 5 years as a standard. Its a trend, and I say this because, while its always been around, and it has always been mildly successful (to very), it has only become popular in recent years, as a response to the World of Warcraft Massacre (thats what I call the MMO craze of 2004-onward). Since WoW, every other single MMO became redundant. All of a sudden, industry wide, suscription models became the BEST way to earn money and everyone wanted a piece of that cake. Then everyone realized their WoW wannabies sucked, and nobody played them. Then WoW started to become "dull" to the general public and suscriptions were not that popular anymore.

Enter F2P. I give you a game like WoW, but you don't have to pay me (for now). LoL is not the best example, because it is an exception, just like WoW was back then. It is a very shining example, of a game done right. Call of Duty: Modern Warfare is an other example. The other Call of Duties simply rode on the success of the first.

The only REAL REASON why games are costing so much, while giving out so little, is because of 3D graphics. Ever since the times of PS1/N64 era (around 97) game costs began rocketing because they were taking technologies that were hard to develop: animation, lighting, texturing, rigging, rendering optimization. So many new specialties were needed, that you ended up having twice the amount of people working on them, with very few exception.

If EA or Activision were to develop a AAA 2D flagship game, and they invested $150 million dollars and gave the developers the 2-3 year REAL devlopment time they should, it would probably bomb in sales... but it would the finest 2D game ever released in the history of humanity. It would grab Nokia's snake, and wrap it around Chess and Solitaire. It would fuck Minesweeper up.

But alas, since 3D came, everyone WANTS graphics, and now you need 10 tech guys working their asses off, so that the textures fit the memory limit, and bashing the level designer because he placed too many props in the ground. Development time just triple, while deadlines just halved.

RANT MODE: OFF.

It'll be interesting to see if this bankruptcy is the mere formality Rubin stated it would be

here is another take on the disagreements between Creditors and THQ.

http://venturebeat.com/2013/01/03/thq-lenders-object-to-its-fast-track-bankruptcy-sale/

THQ has totally screwed over their shareholders with the Chapter 11 filing it'll be interesting to see how badly they burn their bondholders.

Oh my god - not here as well.

THIS IS COMMERCIALS. It is spam. Is CoH2.org going to allow it? Can I post commercials as well?

Jimmy makes money by THQ failing, he makes money from any Relic-game not sold, by shortselling THQ stock. This is no more "information" than a long, written commercial is. He only has an interest in presenting one side of the story. It is reversed commercials, but commercials just the same.

I know it is not my place to tell CoH2.org what it needs to consider, but I humbly hope the staff consider if this is stuff you'll accept on the site. I sincerely believe it is commercials.

It'll be interesting to see if this bankruptcy is the mere formality Rubin stated it would be

No - no, it will not be interesting. It will be gut-wrenching. I wonder what kind of a sick childhood did you have to put a smiley after that sentence you sick f***.

this is not my thread.
if you think carefully about what is going on these conditions basically guarantee CoH2 will be released.

u r taking urself too seriously.

Company of Heroes is only a game. It is a fun game.
No matter what happens you can still play it.

try to relax and enjoy the explosions and the screams of dying soldiers like the rest of us do.

Why is everyone getting so mad at Jim/Tychus? He's just posting articles that say investors aren't happy about this, and obviously they aren't - they're getting screwed and I haven't seen anyone dispute this. If he's shorting THQ stock (which looks like it was a pretty good idea...) then he's doing it because he thought he could make money from the company failing, not because he hates Company of Heroes and wants it to die. Can't you divorce business from gaming? Can't you be a fan of CoH and also think that THQ was horribly run and that they're screwing over investors to try to make sure their stalking horse company wins the bidding?

I prefer his incontrol fan fiction if I'm honest.

Why is everyone getting so mad at Jim/Tychus? [...] Can't you divorce business from gaming?

No, Tycho, you can't. They are one. I've seen you make horrible, horrible posts about how evil greedy THQ/Relic wants all our moneys. It seems like you are completely detached from reality. If CoH2 doesn't have a long and fat "tail", CoH2 won't be supported, because hey - there's no money in it. That's where reality's at!

When Jim says "it will be interesting" he isn't wrong, he's just an arsehole. That is why we get mad.

And whether or not he "hates" CoH is irrelevant. He profits if it fails, and that is the long and short of it - the difference is semantics. His disgusting gloating makes me hope he appears on a r/WTF pic one day.

Why is everyone getting so mad at Jim/Tychus? He's just posting articles that say investors aren't happy about this, and obviously they aren't - they're getting screwed and I haven't seen anyone dispute this. If he's shorting THQ stock (which looks like it was a pretty good idea...) then he's doing it because he thought he could make money from the company failing, not because he hates Company of Heroes and wants it to die. Can't you divorce business from gaming? Can't you be a fan of CoH and also think that THQ was horribly run and that they're screwing over investors to try to make sure their stalking horse company wins the bidding?

Indeed and agreed. Shareholders were long ago screwed over. This isn't the question anymore. If any value remains, the bond creditors will fight over the scraps. The MAIN question for those in this forum, is what happens to Relic. Relic still has some "value" to the creditors or to the stalking horse bidder(s). However, the manner in which this "value" is realized, either via a sale or via liquidation, is the main question. There is no real guarantee that Relic will continue in the form it is in, if at all. With the exception of shipping COH2 which is a virtual certainty in that it will bring in some much needed near-term cash, the longer-term future for Relic is still very much up in the air. Will it continue on or be liquidated post COH2 launch?

Take a look at other recent game publisher bankruptcies such as Eidos and Midway. Eidos went bankrupt and it was acquired by Square Enix. This is the "good" case scenario where Crystal Dynamics studio the main studio at Eidos, survived the bankruptcy and continued on at Square. In the Midway bankruptcy, they filed chapter 11 just like THQ. Midway either shut down or closed most of its studios except it was able to sell the Chicago & Seattle studios to Warner Brothers. In the case of THQ, we know they have essentially 4 studios: Relic,
Volition, THQ Montreal, and Vigil. It's unlikely all 4 make it.

THQ Montreal will survive because of the sweetheart deal with the Quebec Government.

the BC government just starting "getting tough" with video game publishers (including Relic). Relic no longer receives the subsidies it used to get.

my posts provide a rebuttal to the THQ and Relic employees who run around on forums like this saying stuff like "I am not at all concerned about THQ's financial situation". This kind of stance is just used to keep the pre-order money coming in.

The big day for this bankruptcy is tomorrow. If THQ doesn't get teh January 9 sale date they requested it'll be interesting to see if they pull the plug.

I've stated before things I say on this forum are my own personal opinion. I hang out on this forum because I like the community, I've never asked anyone to pre-order anything. This will be the final response I post on this topic; had I known anything I said would have been taken in this manner, I would never have said anything at all.

I'm sorry if anyone thought I was trying to mislead anyone, that was not my intent. I truly believe Relic will come out of this unscathed. That is my own personal feeling and not anyone elses' .

I've stated before things I say on this forum are my own personal opinion. I hang out on this forum because I like the community, I've never asked anyone to pre-order anything. This will be the final response I post on this topic; had I known anything I said would have been taken in this manner, I would never have said anything at all.

I'm sorry if anyone thought I was trying to mislead anyone, that was not my intent. I truly believe Relic will come out of this unscathed. That is my own personal feeling and not anyone elses' .

I hope Relic comes out of this unscathed. The RTS world needs Relic to continue and thrive.

Don't take tychus or tychuu too seriously. Both of them have issues.

if u have an actual direct rebuttal to my posts, that'd be great.
alas, you do not.

Don't take tychus or tychuu too seriously. Both of them have issues.

I don't have any issues