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Tuesday, May 30, 2023

THQ Axing Another $100 Million from Budget

Video game publisher THQ Inc. will cut another $100 million from its budget through studio closures, layoffs and expense reductions, the company said. The Agoura Hills-based company makes the cuts as the economic slump hurts sales of its video games. In November, THQ announced $120 million in cuts from the fiscal 2010 budget and a strategic plan focused on fewer titles that would bring in the highest profits. The poor financial picture showed no improvement in the third quarter as THQ reported a net loss of $191.8 million, or $2.86 per share, on revenues of $357 million. For the same period a year ago, the company had net income of $15.5 million, or $0.23 per share, on revenues of $510 million. A $118 million charge related to goodwill impairment contributed to the net loss for the quarter. With the additional cuts, THQ reduces its 2010 budget by $220 million and reduces its workforce by 600 employees, or 24 percent. Among the closures are offices for the wireless division in San Diego, Great Britain and Germany as that segment of the company undergoes changes to focus on high-end handheld devices. Wireless made up less than 2 percent of overall sales in the third quarter and was the one of the few sales bright spots with an increase over the third quarter in 2007. Sales for Nintendo Wii and Xbox 360 games also went up during the quarter. With a drop in consumer spending creating a cautious retail environment, THQ did not issue a fourth quarter guidance but expects results to be below previous expectations. Shares in THQ closed down at $4.14.

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