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Industry doesn't expect THQ to survive transition to digital

Fri 11 Nov 2011 7:17am GMT / 2:17am EST / 11:17pm PST
Publishing

Experts also single out dedicated handheld gaming as a failed business going forward

Saints Row publisher THQ isn't likely to survive the transition to a digital games business due to a lack of must-have games properties.

That's according to more than 160 attendees of yesterday's London Games Conference, which included senior figures in publishing, development, social and mobile gaming, with over 70 per cent voting the company a 'zero' during a special interactive presentation.

The session, presented by Games Brief's Nicholas Lovell, also asked whether dedicated handheld consoles have a place in the gaming market going forward - more than 80 per cent of attendees agreed that they would not be able to compete with smartphones and other mobile devices offering multiple apps and services on top of games.

Representatives from publishers such as Sega, Ubisoft, Square Enix, Microsoft and Konami also believe that PlayStation Home won't continue as a success, a decision that Lovell disagreed with, labelling it an "unsung hero" of the online business.

The crowd also agreed that social game company Zynga will eventually lose it's shine due to its cynical approach to monetisation, and that the subscription MMO model is on its last legs.

Gaikai, with its back-end cloud gaming model, Amazon with its disruptively priced Kindle Fire, and Tiny Tower maker Nimblebit are expected to play more significant roles in the games business going forward.

25 Comments

Alfonso Sexto Lead Tester, Ubisoft Germany

819 652 0.8
They have Warhammer and Saints Row... better than nothing if you ask me.

Posted:2 years ago

#1

Andrew Goodchild Studying development, Train2Game

1,254 420 0.3
Although Warhammer is licenced, I don't know how longterm that is. I would really like to see Darksiders do well, I liked the first game and loved the universe, I really hope the second one is profitable enough to keep it alive.
My main problem here is that it seems there is an undertone that going digital is synonomous with going mobile.
Sega have an amazing wealth of IP, still come up with interesting projects and still constantly report losses, I hate to say it, but in the short term I'm more worried for Sega than THQ.

Posted:2 years ago

#2
Andrew has it right, Sega has multiple IPs but fail to capitalize on them through existing IP or following through on new IP.

THQ have lacklustre must have titles, but they are trying to develop some new IPs (as afforded in their portfolio remit). All they need is one good mega monster hit to come out smelling of roses, and the other is to combat the recent slew of negative press with a decent title (I dont know if Saints row can be one of them. Hopeful but dubious)

Posted:2 years ago

#3

Greg Wilcox Creator, Destroy All Fanboys!

2,193 1,170 0.5
The continued IDIOT sheep response that compares mobile devices to dedicated handheld gaming is really getting annoying. THEY CAN COEXIST without one taking the place of the other.

As any gamer knows, there's a HUGE difference between using controls and tapping/swiping a glass screen and hell despite some amazing looking device games, the overall quality and longevity of games that cost more is much better than games that cost less.

That and based on the responses to the stuff about Zynga, MMO's and so forth and so on, it's also clear that smartphone gaming will definitely see a slump at some point, knocking a hole in some analyst's balloons as they try and figure out what happened.

Once you have the a big data hack or major service outage that turns millions of smartphones and devices into expensive bricks for a few days or longer, there goes that neighborhood unless there are ways to ensure people can get and use content they paid for.

Posted:2 years ago

#4

Terence Gage Freelance writer

1,288 120 0.1
I think bricks and mortar stores are going to be dominant for at least one more generation - for instance, if The Witcher 2 sells only 1/4 of its total as digital sales, I think we've some way to get yet.

THQ don't have a huge number of major in-house properties, but like Chee says, I think if they can find big success with just one of those it'll be enough to keep the company afloat. I mean, even with all their in-house properties EA and Ubisoft are still making yearly losses of late, and without WoW I believe Activision/Vivendi would be in the red too.

THQ may not be the healthiest publisher out there, but I can think of two or three that are IMO in a less stable position.

Posted:2 years ago

#5

Jamie Read Junior 3D Artist, Neon Play Ltd

127 64 0.5
Like others have mentioned here, I think that there is a lot of publishers that have lots of games IP's, but ones that don't pack a huge punch.
As for the whole digital/smartphone versus consoles/boxed copies argument, I think they can co-exist and they will co-exist together, it will just be a case of digital will have increased sales than it makes now. I'd much rather have dedicated home consoles than fork out for a contracted/PAYG smart phone, just because it has a library of 99% poor games and a handful of good titles.

Posted:2 years ago

#6

Sam Brown Programmer, Cool Games Ltd.

235 164 0.7
Are these not the same people who voted Steve Jobs as the most influential man in the industry ever last week?

Posted:2 years ago

#7

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.

2,270 2,439 1.1
I find the results of this conference absolutely asinine.

That smartphone bubble is looking more and more like NASDAQ circa 2000 every day and our industry execs are rushing in with all money guns blazing.

Posted:2 years ago

#8
Could it be that investors want to invest in something. They see the tech stock as something appealing, because all their buddies are adding it to the portfolio vs investing in cable, worthless sovereign bonds and fluctuating short term speculation.

They see social and casual gaming making profitable gains at the moment and wanting to capitalise on the next big thing, have been advised that smartphones and tablets are the next hottest thing in 2012 (which eventually will be a bubble in its own, but they dont really care now do they because not all are in it for the long game).

Posted:2 years ago

#9

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.

2,270 2,439 1.1
I can understand certain investors latching on for the ride. But industry execs should know better. The average investor knows very little about what they are actually investing in. An exec should know their industry inside and out.

Those offering investment advice...they tend to remind me of that buddy that leads you into a practical joke. They know what you are walking into and they make off with the profit (laugh) and still hope to be your buddy after you get humiliated.

Posted:2 years ago

#10

Klaus Preisinger Freelance Writing

1,132 1,164 1.0
Seeing charts of how Apple brutalized Nintendo's market share of mobile game sales in the past three years, it is easy to see where smartphone hype is coming from. If you are not a content provider for all types of media, you need not compete with Apple. That goes for Nintendo, as well as for Sony and especially Google Android.


I also give THQ the benefit of the doubt to come up with a must have digital business game. $5 motion controlled feces tossing game anyone?

Posted:2 years ago

#11

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.

2,270 2,439 1.1
Klaus, you are looking at market share as thought it's a fixed position. It's not. The pie isn't the same size anymore.

If the pie is now twice as big but Nintendo share drops from 70% to 35%, they haven't really lost much.
Pie 1 | 70% of 100 pieces = 70 pieces.
Pie 1 | 35% of 200 pieces = 70 pieces.

Content providers can still sell those same 70 pieces despite the drop in overall market share.

Posted:2 years ago

#12

Bruce Everiss Marketing Consultant

1,692 594 0.4
Half a million new Android devices are registered every day. Just think about it. They are blowing all dedicated games devices put together out of the water. Soon there will be more smartphones than desktop PCs in the world. This is no bubble, it has only just started.

As to Zynga successfully monetising their work, is that a tinge of envy from the conference?

As for Sega, THQ and Codemasters, it is difficult to hold back from posting what I think.

Posted:2 years ago

#13

Don Hogan Game Artist / 3D modeler

6 0 0.0
Random thought Bruce, how much of the smartphone rise is due to the service providers focusing on them for profits and long term contracts? We tend to view these things from only our perspective as developers, but I think that the effects of other forces are greater than we tend to think

So yes, the numbers are much larger, but the question of what exactly that means to us is still out there and incredibly hard to quantify.

Posted:2 years ago

#14

Klaus Preisinger Freelance Writing

1,132 1,164 1.0
@Jimmy Web

I agree with you, but at one point, publishers want to be part of the big slice of pie, not the small one, no matter how big that has grown.

Posted:2 years ago

#15

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.

2,270 2,439 1.1
Klaus, no reason not to be part of both. Looking at the new 50% with glossy eyes and awe with simultaneously cursing the other 50% strikes me as completely inane.

Posted:2 years ago

#16

Greg Wilcox Creator, Destroy All Fanboys!

2,193 1,170 0.5
Jimmy, I'm chasing you around a table right now.

I've been saying for years that there's a LOT of blindness going on and yes, this bubble is possibly the biggest yet thanks to too much speculation, overuse of stat tracking and a few other tactics that don't tell the full tale. In the long run, I'm hoping it all works out and things settle down to a more sane level. At the end of the day, there's NO way you can sustain this sort of thing in an economy that's rocky in other key areas MORE important than gaming...

Posted:2 years ago

#17

Kevin Parker Chief Sorcerer, PLAY SORCERY Ltd.

3 0 0.0
THQ wont survive because their cost base is too big and their decision making process too poor.

They can buy IPs. They can commission IPs. They don't need to own them. That is not their problem. Having worked at arms length with THQ I don't see how their bureaucratic green light process can pick winners from losers. They are run by marketting people not game people.

Digitial requires small cheap teams of very talented people. It requires them to be nimble and move with the market. It also delivers small profits so there is no room for all the management that a company like THQ (or even EA) have built up to manage the hundred developer mega projects.

Mind you, this is true of the whole industry. We became too bloated and took on too many talentless seat fillers. Worse, we allowed them to get promoted into decision making positions and kept the gamers in development. We have made products that are too expensive for the consumer to afford and let the perceived value of our games fall to zero in the hope that we can find a few mugs to pay a lot of money for worthless virtual goods.

Lets be honest, our industry is no better than the banks which repackaged crap mortages as AAA investments. We were happy with the short term revenue but forgot that we were crashing the market just to get our bonus payments. We confused buying market share with keeping our existing customers happy. We have even started to look for tax payer bailouts instead of looking for new ways to entertain our consumers. THQ is RBS.

Of course, there is one big difference between us and the banks. We are not too big to fail.




Posted:2 years ago

#18

Jamie Watson Studying Bachelor of Games & Interactive Entertainment, Queensland University of Technology

179 0 0.0
i agree with the others that retail (brick and motor stores) will remain around along time,yes games are moving digital but i think until the consumer and global internet speeds have caught up to be fast enough then retail will remain.

As for the paid MMO thing i thing as long as game as a good idea to keep people coming back to it i think it will remain..but not for long..i think the znaga will go FTP with all there titles in the next few years as people dont like the idea of paying for casual games.

As for THQ not surving the transition to the digital space i thing as long as they have a decent enough STRONG performing ip (as others have said) they will do well as long as they dont go 100% digital. (its never a good idea to put all your eggs in one basket)

Posted:2 years ago

#19

Adam Parker Academic Coordinator, Qantm College

15 0 0.0
Yes, the smartphone bubble... Naturally. Tomorrow will be yesterday, of course.

The ridiculously enormous number of Chinese and Indian citizens without one (Chinese smartphone penetration currently at circa 40 million people ONLY) indicates that it's without any growth potential. And there could never be market opportunities outside the NASDAQ, could there.

In 10 - 15 year's time, when companies like Tencent own Sega, Ubisoft, Square Enix, Microsoft and Konami, you might like to remember today.

Posted:2 years ago

#20

Nic Watt Creative Director and CEO, Nnooo

2 7 3.5
Apple have 'brutalised' Nintendo share of a market in 3 years when Apple introduced a phone that people actually wanted with a software model phone consumers could actually use. At the same time Nintendo had an old handheld console reaching the end of its life.

Already Nintendo 3DS has is ready to outsell the Nintendo DS's first year of sales quote

"Nintendo News

Nintendo 3DS Poised to Surpass First-Year Sales of Nintendo DS







Other Nintendo news from the month includes:



Both Wii, up 8 percent year over year, and Nintendo DS, up 23 percent over the previous month, demonstrated strong momentum heading into their respective sixth and eighth holiday seasons. In total, the two platforms have sold more than 87 million combined hardware units and more than 540 million combined units of software in the United States.
For more information about Nintendo, visit [link url=http://www.nintendo.com.]http://www.nintendo.com.[/link]
"



All that has happened is that the phone world has finally woken up to the fact that there are millions of people out there with mobile phone who might, you know, actually buy stuff if the UI, price and hardware was actually half decent instead of the crap Nokia, Sony Ericsson and Motorola have been shovelling us for years.

The way I see it is there are two types of people out there those, like me, who want to play games (a lot) and sometimes make a phone call and listen to music and then there are those who want to make phone calls (a lot) and listen to music (a lot) and sometimes flick birds across the screen. I see a future where you have two types of devices a handheld console which does some non game things Ok but is amazing for games (suits me) and phones which do lifestyle things amazingly and are all right at some genres of games.

The world is not suddenly going to all collapse around the iPhone and other mobile platforms. Sure they are fun right now but all that has happened is that the 95% of the population who didn't play games have suddenly been able to easily buy some simple fun stuff that their friends bang on about. These people are not suddenly going to wake up one morning and decided that screw Angry Birds I'm going to buy Modern Warfare 3.

If you ask me there are a lot of gold rush iOS developers out there who are not going to be developing in a couple of years. 'Cos guess what the people who have played patience on their Windows 95 computer happily for the last 10 years have suddenly found a new hobby flicking birds off are not in the market to buy new games every day/week/month.

All of you out there rushing to iOS are rushing away from the people who buy games machine to play games. A dedicated market just waiting and yearning for more content to fulfil the expectations of a market of people who bought their new phone to 1) look cool, 2) make phone calls, 3) play music, 4) surf the web, 5) read emails and then 6) buy apps and games.

Anyway keep going 'cos the more of you making stuff for iOS means the less competition we have on the other platforms :)

Posted:2 years ago

#21

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.

2,270 2,439 1.1
Nic and Greg, absolutely spot on.

It's not that the smartphone market doesn't have potential, it's just that it's being rushed upon too fast. If you chase short term metrics with long term money you are asking for a lot of failures. And that says nothing about the continued viability of the dedicated console market which is being ignored or completely berated by smartphone developers.

Posted:2 years ago

#22

John Scalzo Editor-In-Chief, Warp Zoned

9 21 2.3
@ Sam Brown

"Are these not the same people who voted Steve Jobs as the most influential man in the industry ever last week?"

Between that announcement and this idea that THQ is somehow going to die when we move to digital distribution (which is still at least two generations away), it's really hard to believe this conference isn't some kind of massive hoax. Saints Row 3 comes out next week and, by all accounts, it's going to be a huge hit. As for Steve Jobs, he released a handheld with a closed architecture that turned a lot of people on to gaming. Didn't Nintendo do the same thing back in 1989? And then again in 2001? And then a third time in 2004?

Posted:2 years ago

#23

Gregory Hommel writer

91 53 0.6
Most of this discussion doesn't move me because I shutter at the thought of an all digital distribution model and I don't plan to participate. The part that did bother me was regarding Home. I rarely ever visit Home. That said, when I do there are thousands of people that seem to be enjoying themselves and moving about with purpose. People are purchasing plenty of virtual items. It's free and most importantly, it's 100% optional. I'm not sure how tight the hold Sony has on development for home is, but the possibilities seem endless for marketing and Indie game sales. Someone tell me what part of that doesn't fit into the future of games.

Posted:2 years ago

#24
When THQ decides to back an IP that isn't well thought out for the long run, like Homefront, and cancels entire series' because of one rushed title, I don't think they need to succeed in digital sales. What they need is a change in what they view as good IP and bad IP. Forcing a franchise down consumers' throats isn't the way to go. Yes, Warhammer is a decent license for them, but its a very, very niche market. The 40k series of action and MMO titles is strong, but what else is going to keep them afloat if the MMO fails?

Posted:2 years ago

#25

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