The auction to find new homes for THQ’s studios and IP concluded yesterday. We’ve just seen the list of bidders made public, with new publishers for some old favourites and THQ’s considerable development talent finding new homes too.
Strangely, this auction process isn’t final. If the total of all bids for all properties is less than the $60 million Clearlake and THQ had previously agreed upon then the judge will allow that earlier deal to go through. If the total is greater than that figure, the judge will declare that the Clearlake deal can’t go through and they’ll hold a second auction to actually sell of the properties. It’s a complex and somewhat bizarre process which is bound to cause plenty of confusion for those of us who aren’t bankruptcy experts. Well, thanks to a letter sent from THQ’s CEO and President to the company’s employees (via Kotaku), we now have some answers for at least what THQ plans to do with it’s assets.
It was rumoured that Sega would snap up Relic and Company of Heroes 2. That seemed like a great fit at the time, with Sega already home to one of the best strategy developers (Creative Assembly) so the news that they tabled the highest bid for the developer is a good sign that they’ll actually make the purchase once the sales properly begin. That has now been confirmed, but THQ’s letter only specifies that Sega has agreed to purchase Relic itself (for $26 million) – presumably that includes the Company of Heroes IP and the upcoming second game, but that is as yet unclear.
We also heard rumblings that Koch were looking at Evolve, the Turtle Rock game that was leaked in bankruptcy filings. It seems that Turtle Rock has actually been bid on by Take 2, presumably taking their in-development game with them when they go. Koch was also been linked by rumours to Volition, the developers of Red Faction and Saints Row (although those properties would be sold separately) and that deal seems much more likely now, along with the purchase of Metro: Last Light by Deep Silver’s parent company. The official word from THQ is that Koch has agreed to purchase Volition ($22.3 million) and Metro ($5.8 million); Volition is a reasonably clear cut case (although whether the Saints Row and Red Faction franchises are included is again unclear), but things are less clear with Metro. The Metro name itself was licensed by THQ from the author who created the universe, and that license would seemingly not be transferable (a new license would need to be signed by Koch), and the game’s developers 4A are independent and therefore not up for auction here. Presumably, THQ means that the current game in development, Metro: Last Light, has been passed to Koch.
It also seems that Take 2 has bought up the Darksiders IP but intends to pull down the shutters on Vigil, who weren’t bought up by anyone. THQ’s message mentions that Take 2 has agreed to purchase the in-development Turtle Rock game Evolve (for around $11 million; Turtle Rock themselves, like 4A, are independent), but makes no mention of Darksiders. Later in the note, it is confirmed that an agreement for Vigil was not reached, and that the company will be looking to sell it off as part of the bankruptcy process. Obviously the poor reception to and performance of Darksiders 2 is to blame here, but it’s worth noting reports that minimum bids in the auction were pegged at $500,000 (more on this in a mo), so its possible that potential buyers simply didn’t value Vigil to that number.
EA and Warner have both been named in much of the speculation so it’s a surprise that they haven’t cropped up for anything just yet. It seems that Crytek thinks it can turn around the fortunes of Homefront, with a rumoured bid of $500,000. Things with Homefront are again not wholly clear – Crytek themselves are developing the game, so it appears that the company just wants to make sure that their work has not gone to waste. It’s likely that Crytek could later sign on with someone like EA (who they have close ties with over the Crysis franchise) to bring the game to market.
There is also some confusion over the future of South Park: The Stick of Truth, with THQ attempting to sell the licensed game and its licensees insisting that they don’t have the rights to sell a game they don’t wholly own. Ubisoft had been rumoured for that one and it seems that the French company has tabled the highest bid for it – $3.2 million – as well as the THQ Montreal studio ($2.5 million, which should see former Assassin’s Creed designer, Patrice Desilets, return to Ubisoft). The Montreal deal is reasonably clean cut – although whether Desilets will return to Ubisoft is another question entirely – but we’ll have to wait for word on whether South Park Studios will step in to make another deal elsewhere. Either way, the game’s developers Obsidian are independent, so are not up for grabs themselves.
As we’ve already mentioned, while THQ notes that they expect these deals will be approved, things are still up in the air to some extent until the judge in the case does agree to them, but we should hear on that soon. There are also still questions surrounding Vigil, as well as some of THQ’s smaller and older IPs like Titan Quest or Homeworld – likely these weren’t worth the minimum bid price, and will be picked up later for cheaps.
Finally, on a somewhat related note: Our resident cuddly bear, Tuffcub, has spotted something of a bargain deal over on Amazon.com – 19 THQ games to download for PC for just $25.
Update: We appreciate that this is quite a wordy article and quite long. Here’s the tl;dr:
- Sega has agreed to buy Relic and Company of Heroes 2 for something like $26.6 million, narrowly beating out a bid of $26.3 million from Bethesda’s parent company, Zenimax.
- Koch (owners of Deep Silver) have agreed to buy Volition (makers of Red Faction and Saints Row) for $22.3 million and Metro Last Light (4A Games are making that and are not a part of THQ) for around $5.88 million (beating a Ubisoft bid of around $5.1 million). They’ve said that Deep Silver will head all future Saints Row and Metro development.
- Crytek has agreed to buy Homefront for around $540,000.
- Ubisoft has agreed to purchase THQ Montreal, and the games it was working on. That means 1666 and Underdog, both leaked in bankruptcy filings.
- Ubisoft has also agreed to buy the rights to South Park: Stick of Truth for $3.3 million but that potential deal could be scuppered by legal action being taken by South Park Studios.
- Take Two Interactive have agreed to buy the publishing rights to Evolve for $10.89 million, Turtle Rock’s game which was leaked by the bankruptcy filings.
- The WWE license will revert back to WWE themselves since THQ is ceasing to exist. THQ didn’t own the brand or the studio (Yuke’s) that made the games. Reports are floating around that Take Two (2K’s parent company) has separately negotiated the picking up of that license with WWE.
- There’s no word on the less current IP that THQ presumably still held rights to – things like Destroy All Humans! MX vs ATV and Big Mutha Truckers. Hopefully those IPs won’t die with the publisher.
cc_star
Ctrl+f “Destroy All Humans”
Ctrl+f “Big Mutha Truckers”
No mention.
Looks like I’ll be able to move in & bid £1
HoboCastro
Be quick. Their due up next in court for bankruptcy.
Tuffcub
Hunter @DDInvesting
500k Homeland (Crytek), 5.8M for Metro (Koch Media), South Park for 3.2M (Ubisoft)
So unless the studios were sold for a fortune, it’s back to the original plan – but as they’ve already told staff they are being let go.. feck knows.
At least in it’s death throws THQ is being consistent as ever and being a mess..
cc_star
All the staff have effectively been let go, but can be rehired by new owners.
But in the case of Relic & SEGA who obviously own Creative Assembly, I’d say there’s plenty of overlap there so at best I can see there being job losses
Tuffcub
Oh OK looks like the made it.. “Koch successfully bid $22m for Volition. “
Alex C
It is utterly bizarre to see THQ fall like this and be picked at. They were huge. With great games. :(
Alex C
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 [Nirolak’s Note: Turtle Rock of Left 4 Dead fame’s game] and
Ubisoft agreed to purchase Montreal [Nirolak’s Note: Patrice’s game and perhaps Volition Montreal] and South Park
We expect these sales to close this week.
[Nirolak’s Note: Vigil didn’t make it.]
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
avengerrr
Interesting extra piece of information. Certainly summarises the events clearly (no offence to the article).
Alex C
Hopefully Peter can update later.
HoboCastro
For 500K I don’t think Crytek are getting much more than the engine they sent THQ.
cc_star
A brand.
Which Crytek will still have to spend shit loads marketing… With the huge costs needed to bring the product to a crowded market I can’t see it being worth even that.
avengerrr
They can create Homefront using CryEngine 3 easily. They bought the idea, name and universe (aka narrative world) so they can do what they like with it… shouldn’t cost much with the amount of licensees for the engine that they have.
tactical20
EA should relaunch Homefront in the style the PS2 game, Freedom Fighters.
Tuffcub
Koch have nabbed Saints Row along with Violition and Evolve has gone to Take Two.
Tuffcub
71 m raised
gazzagb
Hopefully though all the Devs working on the franchises will keep their jobs and just be rehired. I said it in the previous article and I’ll say it again; I’m praying Crytek don’t let EA fuck up Homefront 2, loved the first game so I’ve high hopes for the second.
avengerrr
Crytek seem pretty solid where their past projects are concerned, they haven’t let EA bullshit them too much.
It’s sad to see such a great publisher go like this and with inevitably some job losses. Let’s hope with their (employees) portfolio/job history the unemploeyed can find something new quick.
Peter Chapman
Crytek’s deal with EA is only a publishing partnership, isn’t it? They could sell publishing rights to Homefront 2 to anyone they see fit (they also have had similar publishing deals with Ubisoft, for example).
gazzagb
True, but they’ve got strong ties with EA so I assumed EA would be publishing the game, especially as EA previously said they were interested in picking up some THQ titles.
skibadee
R.I.P THQ enjoyed a lot of the games you made.