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THQ has 50/50 chance of going bankrupt - Hickey

Mon 02 Mar 2009 8:29am GMT / 3:29am EST / 12:29am PST
Business

But Farrell "confident" of return to profitability

Analyst Michael Hickey of Janco Partners has said that THQ is in real danger of going bankrupt – comparing the company to troubled publisher Midway.

According to a report by the LA Business Journal, Hickey puts THQ chances of going bankrupt at 50/50.

"You have mediocre product and you’re running out of cash,” said Hickey. “Not the situation they want to be in right now."

Speaking on the possibility of THQ being acquired by a rival publisher, Hickey warned that the company doesn't have a lot of attractive IP as it relies heavily on licensed product from partners such as Disney/Pixar and the WWE.

"You want a strong basket of original properties that are of high quality, that’s what acquirers are looking for. Otherwise you have Midway," said Hickey.

However, CEO Brian Farrell has dismissed talk of acquisition and bankruptcy, telling the paper that its latest cost-cutting plan will return the company to profitability.

"I know that makes for good print and sells newspapers, but those aren’t the kind of things we focus on right now," said Farrell

"When the stock price is depressed, the naysayers can have their day in the sunshine. But we have a plan that we’re very confident will give us cash and return the company to profitability."

3 Comments

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

2,271 2,440 1.1
This is the same analyst that claimed a non-Blu-ray PS3 in talks at Sony.
[link url=http://www.gamesindustry.biz/articles/ps3-price-cut-announcement-in-the-next-couple-of-days-janco#comments
]http://www.gamesindustry.biz/articles/ps...[/link]

I'm finding it very difficult to accept what this man has to say with any level of validity.

Posted:5 years ago

#1
THQ still has a wide portfolio of popular games under it's belt, I dont think it's going anywhere just yet. Q2 results will be better I think, but I'm on the glass half-full team ;)

Posted:5 years ago

#2
I stand by my statement that this "analyst" makes dramatic and useless statements to get his name on the front page. While not all of THQ's games might be top of the line, I can think of at least one thats pretty popular as far as RTS go and thats Company of Heroes.

THQ also has a UFC game set to be released in spring 2009. The recent surge of UFC's popularity in North America (and moving into Europe) gives the game a lot of momentum. Most of their target audience of 16-30 year olds are likely to own a console so for the fans it comes down to how convincing the game is going to be incorporating the MMA theme (realistic, not WWE type combat) and a high level of customization. This should be an easy sell for them since they've been making wresting games for over a decade.

Edited 1 times. Last edit by John Amirrezvani on 2nd March 2009 5:32pm

Posted:5 years ago

#3

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