Publisher THQ has seen first quarter losses increase from $30.1 million to $38.4 million.
Sales were up to $195.2 million compared to $149.4 million for the same period last year, but disappointing sales of the Red Faction franchise have prompted the company to shelve the series.
"We are disappointed in our first quarter financial performance," said CEO Brian Farrell. "Sales of Red Faction: Armageddon and our licensed kids titles were below our expectations, and the late release of UFC Personal Trainer also adversely impacted the quarter."
In a conference call following the results, Farrell said the company would no longer continue with the Red Faction brand, despite it finding an audience on current-gen consoles.
"Given that that title, now in two successive versions, has just found a niche, we do not intend to carry forward with that franchise in any meaningful way.
"In today's hit-driven, core gaming business, even highly-polished titles with a reasonable following like Red Faction face a bar that continues to move higher and higher.
"Moving forward, our core game titles must meet a very high quality standard with strong creative and product differentiation, appeal to a broad audience, and be marketed aggressively."
Red Faction developer Volition is currently working on Saint's Row The Third and Insane, with movie director Guillermo del Toro.