THQ announced on Wednesday that it has filed for Chapter 11 bankruptcy. The move really comes as no surprise considering the publisher hasn’t been doing too well for quite some time now. A recently article on latimes.com shows just how far THQ has fallen. As recently as 2007, the company was valued at $2 billion. When the market closed the day before the bankruptcy announcement on December 18th, 2012, it was worth just $11.3 million.
On Wednesday, THQ announced that it entered into an Asset Purchase Agreement with affiliates of Clearlake Capital Group, L.P. to acquire substantially all of THQ’s assets including their four game studios (Relic Entertainment, Vigil Games, Volition, and THQ Studio Montreal) as well as games currently still in development, intellectual properties, and contracts with developers such as Crytek, 4A Games, South Park Digital Studios, Turlte Rock, and Obsidian Entertainment.
Clearlake has offered $60 million for THQ’s assets as the “stalking horse bidder.” Other bidders will have a chance to come forward with a better offer before a sale is finalized. Ubisoft could be another candidate to make a bid. CEO Yves Guillemot said last month that they were interested in THQ’s assets.
While this is undoubtedly bad news, it doesn’t necessarily mean that THQ is done for. According to the official press release, THQ will continue normal business operations without interruption pending Court approval of their first-day motions. The studios will remain open and development teams continue working. In a community statement released by THQ’s President Jason Rubin, he described the filing as a “new start” and explained what Chapter 11 bankruptcy means for the company:
“The most important thing to understand is that Chapter 11 does not mean the end of the THQ story or the end of the titles you love. Quite the opposite is true, actually.
Chapter 11 is a safety net for U.S. companies. American Airlines is currently in Chapter 11 restructuring, yet I flew back and forth on that airline when I visited Volition two weeks ago. Donald Trump and his companies have been in Chapter 11 four times. You can add to that list household names such as Macy’s, Eddie Bauer, the Chicago Cubs, Chrysler, Delta Airlines, General Motors, the Pittsburgh Penguins, Marvel Studios, and MGM, among many others.
MGM filed Chapter 11 two years ago, and this year it released ‘Skyfall’ and ‘The Hobbit,’ two of the biggest titles of the year. That’s what I mean when I say new start!
Our Chapter 11 process allows for other bidders to make competing offers for THQ. So while we are extremely excited about the Clearlake opportunity, we won’t be able to say that the deal is done for a month or so. “
So gamers can still expect upcoming games published by THQ such as Metro: Last Light, South Park: The Stick of Truth, Company of Heroes 2, and Saints Row 4 to be released. In fact, they will likely be counting on these games to recover financially.
“If South Park and Saints Row work, they might actually pull through,” industry analyst Michael Pachter told me.
Let’s hope he’s right.