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Take-Two CEO Predicts THQ's Imminent Demise

Cage fight. It's the only way to settle this.

It’s always a little bit peculiar when one company’s boss talks about another company’s prospects but Take-Two CEO, Strauss Zelnick, has gone further than I think we’ve ever seen in the past.

THQ won’t be around in six months.

Zelnick’s words came during a talk at the MIT Business in Gaming conference yesterday and were first picked up on by the fine fellows at Joystiq. During the talk, Zelnick admitted that Take-Two’s financials weren’t exactly rosy, showing a year-on-year decline. But he insisted that the difference between his company and THQ was that his strategy of focussing on quality would pay off in the long run.

According to Zelnick, THQ’s reliance on licensed properties was strangling their profitability thanks to repeatedly renegotiated deals narrowing their margins. He acknowledged THQ’s attempt at a drive towards first party IP a few years ago but also pointed out how that hadn’t gone well for them.

Strategy didn’t work and the execution was bad. To put it another way: the food was no good and the portions were small.

THQ has since responded by saying “Obviously, Mr. Zelnick’s perception of THQ is outdated and inaccurate. His comments are irresponsible and false. Perhaps he would be better off commenting on his own business.”

Sticking to your own business is certainly good advice but aside from the wonderful (and successful) Saints Row The Third, THQ’s first party IP in recent years kind of lends weight to Zelnick’s words. The Red Faction franchise took a big step backwards and Homeland and MX vs ATV were critical and financial failures, by all accounts. Perhaps 2012, with Darksiders II will be their year to put out some exceptional games based on their own IP and prove Zelnick, and many others, wrong.

Source: Joystiq and Joystiq again

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25 Comments
  1. Taylor Made
    Member
    Since: Oct 2011

    what are THQ responsible again, they made red faction series & wrestling franchise didnt they? What else?

    Comment posted on 06/04/2012 at 10:21.
    • Taylor Made
      Member
      Since: Oct 2011

      oh how I wish i could delete this comment lol

      Comment posted on 06/04/2012 at 10:22.
      • tonycawley
        Pint! Pint!
        Since: Feb 2009

        This is why we read the articles the writers bother to take the time to write before we comment. I often find the questions I might have had before reading the article are actually answered within said article.

        Comment posted on 06/04/2012 at 10:58.
      • Taylor Made
        Member
        Since: Oct 2011

        erm ok..didnt realize i was back in school. I did read the article but just asked the wrong question cause i got distracted & forgot what i wanted ask which was aint they responsible for the wrestling series

        Comment posted on 06/04/2012 at 12:26.
      • tonycawley
        Pint! Pint!
        Since: Feb 2009

        Lol!

        Comment posted on 06/04/2012 at 15:06.
      • Radiitz
        Member
        Since: Jun 2010

        I was going to tell the other guy who responded to you to give you a break, because you made a mistake. Then I read your reply to him.

        Da F@ck is the matter with you?

        Comment posted on 06/04/2012 at 17:28.
  2. yogdog
    Member
    Since: Feb 2010

    Warhammer 40k Dawn of War, Company of Heroes, they both sold well, however they’re not mainstream games so they can’t cover the losses made it other departments. I will be absolutely GUTTED if Relic Entertainment gets shut down, my second favourite dev after Creative Assembly (3 guesses what games these guys make…).

    Comment posted on 06/04/2012 at 10:23.
    • yogdog
      Member
      Since: Feb 2010

      *made in

      Comment posted on 06/04/2012 at 10:24.
    • colossalblue
      Team TSA: Editor
      Since: Forever

      For me, that’s been THQ’s biggest failure over the years – what they’ve done to their fantastic studios. Volition’s value now, compared to when THQ purchased it, is depressing and the stock options they got as part of the THQ buyout are practically worthless compared to their value at the time.

      THQ has access to some great talent, with some great IP (Saint’s Row, Red Faction, Company of Heroes) but they do still focus on licensed properties and the profit margins in that do narrow over the years, which might explain why Volition put out a shoddy Red Faction game rather than taking time to make another good one – perhaps their properties with wider margins are increasingly more important so they feel pressure to get them out more often. We’ll learn a lot from how rushed the next Saints Row is, considering its recent success and the importance it now has in THQ’s portfolio.

      Comment posted on 06/04/2012 at 10:48.
    • Deathbrin
      Member
      Since: Aug 2009

      Metro!

      Comment posted on 07/04/2012 at 07:41.
  3. The Lone Steven
    Never heard of him.
    Since: May 2010

    Seeing as SR3 was a success, i doubt that they are in danger of folding within the next 6 months. However, they do need to get more first party games out as i think SR3 is the only notable game that i can think of that was developed by them that sold well.

    Oh and do a decent RF or release it on the store or give it a coat of HD and release it. Actually, a proper sequel to RFG would be excellent, just take what was excellent from, put in some new features as well and have a decent story and they will see a lot of profits. :)

    Comment posted on 06/04/2012 at 11:09.
    • Rabid-Coot
      Member
      Since: Oct 2009

      Any success SR3 had was negated by other stuff like u draw failing in the same quarter.

      Comment posted on 06/04/2012 at 11:22.
    • KeRaSh
      Member
      Since: Nov 2009

      All I wanted was RFG with coop… It’s a shame they halfheartedly handled the last game which led THQ to the decision to kill the franchise.

      Comment posted on 06/04/2012 at 15:09.
  4. Rabid-Coot
    Member
    Since: Oct 2009

    If I remember right their last financial results had them with $50 million in cash and no debt and an estimate of them being down to 25 million in cash by the end of their next quarter (might also be their year end.)

    There’s still a chance that they could bounce back from this but at this point they really do need every game to do well, a few more flops will destroy them.

    Comment posted on 06/04/2012 at 11:29.
  5. Foxhound_Solid
    Is a smart cookie.
    Since: Dec 2009

    Boring games that never interest or excite me. This Gen has been a struggle for them.

    Comment posted on 06/04/2012 at 11:31.
  6. Mickey2010
    Member
    Since: Jan 2010

    apart from the Saints Row franchise and the first UFC game THQ have not really impressed me this gen! Mx V ATV they truely dropped the ball with a franchise that was great on the PS2 same with Red Faction.

    Comment posted on 06/04/2012 at 15:35.
  7. aerobes
    Member
    Since: Aug 2009

    If they crumble and take Metro: Last Light with them. There’s every possibility that I might cry. A lot.

    Comment posted on 06/04/2012 at 17:12.
  8. Burgess_101
    Member
    Since: May 2009

    I think they need to create a brand new IP. Otherwise I also feel they will fold not necessarily in the next 6 months but soon. Darksiders II alone wont keep them afloat.

    Comment posted on 06/04/2012 at 17:14.
    • Sympozium
      Member
      Since: Aug 2009

      Somethings they just need to scale back on I guess.

      Comment posted on 06/04/2012 at 18:22.
  9. Sympozium
    Member
    Since: Aug 2009

    Go Steam exclusive?

    Comment posted on 06/04/2012 at 18:22.
  10. TheDemocrodile
    Member
    Since: May 2010

    Sequel to CoH and everything will be fine guys, you can have that golden idea THQ, next time ill want paying.

    Comment posted on 06/04/2012 at 19:33.
    • Sympozium
      Member
      Since: Aug 2009

      I’d love to see a new Company of Heroes, would have to upgrade my pc however.

      Comment posted on 06/04/2012 at 23:13.

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