Closing Australian Studios Is An Expensive Business…

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.


  • Damn it Mark… just when I’m thinking to myself how average the last few posts have been, here YOU come with something of interest 😛

    But yeah, about the Avengers game, it’s definitely a loss. But I figure it this way, I’m sure at some point they thought about finishing it, but it seems they just decided to cut their losses and that the potential income from the game would not really outweigh/ balance the costs of continuing to keep the studio open etc. If it’s keeping an entire studio open at a loss for just 1 game, I can see how they came to this decision.

    However, I’d love to understand the whole, not transferring the license over to one of their other studios etc, I don’t actually get it, after the effort they went to securing the license to it…. Must have been a massive decision overall, for better or worse

  • Nooo THQ deliver some awesome PC gamimg titles.. this had better be some shrewd accounting that makes THQ stronger in the end. Someone needs to release games other than EA!!

  • It’s a bloody shame that all this stuff continues to happen, not just to THQ, but to plenty of publishers that distribute hard copies of games..

  • Makes you wonder if it would be cheaper just to finish the titles in development and let contracted staff’s agreements expire than payout severences. At least the finished title would make some money back.

    And $16 million for an IP liscence? So the Avengers game had to sell 266,666 units (not counting the retailers cut, at the standard $60 USD assuming this is in USD) before the company could even start paying off there own development costs? Goes to show my belief that studios who develop their own IP have a greater track record finacially.

    Should of sacked the business gurus before the studios in this case.

    • It was not America’s fault that many of our studios relied too heavily on work coming out from America because it was cheaper for them to do it here 18 – 24 months ago. If anything the studio directors here who decided it was cheaper to work on outsourced work rather than developing our own IP’s should be the ones taking the blame for our now destroyed industry.

  • I blame their new logo. Old logo THQ was awesome. Then somebody brought their kid to work one day, gave them some crayons, and killed the Australian gaming industry.

  • The logo is certainly a step down from where they were at. I estimate the budget for the logo change to be around $250,000. No I’m not kidding – this is what I do for a living ( >_< ). The rebranding project would have been a huge affair for a multinational like THQ.

    Consistently, THQ seem to misunderstand and insult their customers. I really don't understand their management team, but then again, this is a liquid business environment at the moment. I wish them best of luck…

  • Lets’s not forget the large marketing cost that would have had to be forked out AFTER the cost of finishing the game. Sure they can ride their license over the line but millions (if not tens of millions) would have been spent.

  • Lets’s not forget the large marketing cost that would have had to be forked out AFTER the cost of finishing the game.

  • I am so sick of Corporate pulling the plug on studio after studio here. Why? What have we done? So many A list games were developed by Aussie studios and yet they keep doing it.
    Is it because they are essentially involved in production of illegal substances due to the draconian censorship laws?
    We can and have proven we do top notch work. I’m sick of this country and its war on creativity. /me out.

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