The latest news in the ongoing saga of publisher THQ's financial woes paints a grim picture for the company's intellectual properties, but also posits a chance for salvation.
THQ stock crumbled last year in the wake of middling game sales and a failed investment on uDraw - a tablet controller that saw great initial success but whose overproduction ultimately caused severe (read: multi-million dollar) losses. The publisher's last major release - Darksiders II in August 2012 - failed to meet sales expectations, and after hemorrhaging the damage by declaring bankruptcy and accepting acquisition by Clearlake Capital Group, it appears that THQ (rather, Clearlake Capital) will attempt to recuperate by auctioning off some of THQ's biggest franchises on January 22.
Distressed Debt Investing (via Twitter) covered details of a bankruptcy hearing on January 4 in the state of Delaware. At that hearing, it was affirmed that five companies were in bids for THQ's properties as a group, but protestation from certain THQ lenders and Roberta DeAngelis, a U.S. trustee overseeing the case, favored a title-by-title approach that would allow bidders to better assess the value of each property. In a second hearing that took place today at 10:30 AM, all involved parties came to an agreement that will see certain THQ properties - which may include Saints Row and Darksiders, among others - auctioned off piecemeal in a couple weeks.
While there is no concrete word on which companies will be bidding for acquisition, or on which properties are up for sale, DDI reports that Electronic Arts is not only a potential buyer, but visited THQ headquarters recently.
It's important to note that not all of THQ's intellectual properties will be auctioned off, but the roster of franchises up for sale is not public information at this time. The news of property sale may be troubling to THQ franchise fans, but it's important to remember that this sale may keep THQ from ceasing to exist, as the publisher reportedly stated during January 4th's hearing that they "would likely run out of money within the month".
Thanks to the team at Polygon, who spotted the tweets by DDI and continue to cover the THQ tragedy.
Which THQ franchises should be sold, and which should be kept? Should EA move in as a buyer? Activision? Ubisoft? Sony? Let us know your thoughts and predictions in the comments below.