THQ stock drops 26% following Homefront reviews
Low Metacritic score leads to panic selling as de Blob 2 also underperforms
The share price for publisher THQ fell by almost 26 per cent yesterday, after intense trading followed disappointing reviews for key upcoming title Homefront.
The new first person shooter from Frontlines: Fuel of War developer Kaos Studios currently has a rating of 72 for the Xbox 360 version on review aggregator site Metacritic - with several major websites giving the game a score of between 50 and 70.
This appears to have been the catalyst for trading over four times the daily average, with almost 7 million shares changing hands and the price dropping as low as $4.40 per share. This rose to $4.70 in afterhours trading.
The fall followed a 7 per cent rise on Monday to $5.94, which appeared to coincide with a smaller number of more favourable reviews for the game.
The volatile trading appears to be due almost entirely to anticipation over Homefront, which THQ's executive vice president Danny Bilson stated must sell 2 million copies to break even.
A certain level of success did seem to be guaranteed for the game when Bilson revealed that it was the company's most pre-ordered title ever, with over 200,000 reservations made.
The Homefront reviews have not been the only source of negative news for THQ recently though, with new title de Blob 2 selling 'much less' than 75,000 copies in the US and failing to make the UK Top 40 in its first week on release. The game also suffered a relatively low 77 Metacritic score.
According to an analyst note from Wedbush Morgan's Michael Pachter sales of the uDraw game tablet on the Wii have also begun to slow, with just 26,000 US sales in February. Although the hardware bundle did perform much better over Christmas and broke into the UK Top 10 on its European debut this month.
THQ's most recent financial results showed a $14.9 million loss and a drop in revenues to $314.6 million. At the time the company assured investors that its fiscal 2012 results would be significantly boosted by the release of core games including Red Faction: Armageddon, Warhammer 40,000: Space Marine, MX vs ATV Alive and Saints Row: The Third.