In Real Life

Closing Australian Studios Is An Expensive Business...

While THQ has issued a statement claiming that it’s 2014 schedule is safe, allaying fears that the company was struggling for survival. There is little doubt that THQ is in a difficult spot. 2011 was undoubtedly a difficult year, with its share price dropping to 66 cents.

For perspective, THQ’s share price was $33.73 just five years ago. In addition, 2011 marked one of the toughest years for THQ in terms of operating costs — with a significant chunk of that cash being used to close down its two local Australian studios. Almost $40 million to be precise.

$4.4 million of that figure was allocated to severance packages and other wage-related issues, whilst the biggest figure — $17.5 million was allocated to costs related to the “cancellation of two unannounced titles in development” at THQ Studio Australia and Blue Tongue.

Perhaps the most interesting loss, however, was the flat fee THQ paid for the use of The Avengers licence, money THQ simply had to write off after the cancellation of the game in development at THQ Studio Australia. That figure amounts to a round $16 million. A pretty huge chunk of cash to simply throw away.

All up it’s a massive loss, and while one can only assume it must have made financial sense for THQ to shutter these two studios in the current climate — in terms of how much it would have cost to keep both studios running — it feels like a waste for The Avengers game in particular. For a game so far into development, with so much being spent on the acquisition of the license, surely it would have made more sense to simply finish and release the game?

It’s hard to say, but I would personally have liked to see what THQ Studio Australia had achieved with such a high-profile licence, but now we’ll never know.

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