THQ Sells its Assets and Waves Goodbye

THQ, after a series of games that didn’t quite come to par, filed for Chapter 11 bankruptcy and sold off its assets, totaling in at around $72 million. Almost all of THQ’s assets were bought (some were not for sale) by other developers; Vigil Games (the developers of Darksiders) did not receive a bid and the fate of the employees is currently unknown.

“While we had hoped that the restructuring process would allow the company to remain intact, I am heartened that the majority of our studios and games will continue under new ownership. It has been my pleasure to work alongside this great group of people, and I am proud of the imaginative and artistic games that our team has created. Although we will no longer be able to work together with a unified mission, I am confident that the talent we have assembled will continue to make an impression on the video game industry. For those whose positions are not likely to continue, I sincerely regret this outcome, and we will be meeting with you over the next few days to discuss the transition.” – Brian FarrellChairman and CEO of THQ

Jason Rubin, president of THQ, was able to see some of the positive side as he said:

“I am pleased that the new buyers will be providing jobs to many of our very talented personnel. When we first announced the sale process, I said I would be happy if the company’s games and people had a bright future even if it meant I did not have a job at the end of it. And I still feel that way.”

All of THQ’s assets (except Vigil) sold for these prices:

  • Evolve (a title in development) – Bought by Take-Two for $10.894 million
  • Homefront (series, sequel in development) – Crytek, $544,218
  • Metro series – Koch Media, $5,877,551
  • Relic Entertainment – Sega, $26.6 million. (ZeniMax was close with $22.3m)
  • South Park: The Stick of Truth (License) – Ubisoft, $3,265,306
  • THQ Montreal – Ubisoft, $2.5 million
  • VolitionInc. – Koch Media, $22,312,925

On top of this information, we also have a letter to the employees:

To All THQ Employees:

We now have the answers we’ve been seeking through our financial restructuring and Chapter 11 case. While much will be written, here are the facts of the bids and auction that occurred:

Yesterday morning, we received a competing bid for the operating business, along with Clearlake’s offer, and numerous offers for separate assets. During an auction process that lasted over 22 hours, the final conclusion was that the separate-asset bids would net more than a single buyer for the majority of the company.

Shortly, we will, present the results to the U.S. Bankruptcy Court, which must concur with our assessment. The proposed sales of multiple assets is as follows:

Sega agreed to purchase Relic
Koch Media agreed to purchase Volition and Metro
Crytek agreed to purchase Homefront
Take 2 agreed purchase Evolve and
Ubisoft agreed to purchase Montreal and South Park

We expect these sales to close this week.

Some assets, including our publishing businesses and Vigil, along with some other intellectual properties are not included in the sale agreements. They will remain part of the Chapter 11 case. We will make every effort to find appropriate buyers, if possible.

What this means for employees

We expect that most employees of the entities included in the sale will be offered employment by the new owners. However, we cannot say what these owners may intend, and there will likely be some positions that will not be needed under the new ownership. You should receive notice this week or early next week if the new owners intend to extend employment to you. Please note that the terms of your new employment, including pay and benefits, may be different from the current terms of your employment with THQ.

If you are an employee of an entity that is not included in the sale, we regret that your position will end. A small number of our headquarters staff will continue to be employed by THQ beyond January 25 to assist with the transition. THQ has sufficient resources to pay these employees for work going forward, and we will be contacting these employees immediately to ensure their continued employment during this transition period. We are requesting the ability to offer certain severance pay to minimize disruption for employees of non-included entities as they determine the next steps in their careers.

We know you will have many questions about this news. We’ll be meeting tomorrow when we return to talk through this announcement and to answer any questions you have. You will receive a benefits fact sheet and FAQs with answers to some questions that may be on your mind. Please review these materials closely.

A personal note

The work that you all have done as part of the THQ family is imaginative, creative, artistic and highly valued by our loyal gamers. We are proud of what we have accomplished despite today’s outcome.

It has been our privilege to work alongside the entire THQ team. While the company will cease to exist, we are heartened that the majority of our studios and games will continue under new ownership. We were hoping that the entire company would remain intact, but we expect to hear good news from each of the separate entities that will be operating as part of new organizations.

For those THQ employees who are part of entities that are not included in the sale, we are confident that the talent you have displayed as part of THQ will be recognized as you take the next steps in your career.

Thank you all for your dedication and for sharing your talent with the THQ team. We wish you the best of luck and hope you will keep in touch.

Sincerely,

Brian Farrell
Chief Executive Officer

Jason Rubin
President

It is unsettling to see a good company come crashing down, after such a long time making games. It goes to show how a streak of bad production can kill something great. There are still unknowns at the moment, as THQ Montreal and the WWE franchise have not had any details released.

Despite the first Homefront‘s bad reception, Crytek will begin working on a sequel at Crytek’s UK studio.

“Since we first reached an agreement to develop Homefront 2, we’ve been firm believers in the IP and its potential to excite and amaze players. Our cooperation with THQ was always positive and we would like to thank them for all their support over the last two years and express our sympathy to those affected by the recent events at the company.” – Cevat Yerli, CEO of Crytek

“From day one, the Homefront 2 team has been committed to creating a game that takes the series to new heights and features the level of quality and innovation associated with Crytek. Nothing has changed with regards our development of the game, and we look forward to sharing the finished product with players.” – Nick Button-Brown, General Manager of Games at Crytek

Article sources: Kotaku (1) (2)Venturebeat

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