THQ focuses on core as pressure mounts on board
Alleged letter from former staff calls for board to change senior management after "numerous mistakes"
THQ has confirmed it will cease production of children's titles to refocus its efforts on core and digital. The news comes the same day as an alleged open letter from ex-THQ employees requesting top executives like CEO Brian Farrell are fired.
"THQ will be a more streamlined organisation focused only on our strongest franchises," said Farrell in an official statement regarding the change of focus.
"The success of Saints Row: The Third is an example of what our revised strategy and focus can achieve. We have now shipped 3.8 million units globally and are currently expecting to ship between five and six million units lifetime on this title. Additionally, our robust digital content offerings for this game have resulted in the highest digital revenue of any console title in our history."
It's not clear exactly which titles have been dropped, THQ only stated that it is "in the process of exiting its relationships with kids' licensed entertainment companies" but recent rumours suggested that THQ was working on a tie in for the Disney/Pixar title Brave. Before this decision, it also had deals with Nickelodeon, Bratz and Dreamworks.
Farrell and his salary played a large part in the letter apparently sent by former staff members to the THQ board, and shared with forum site NeoGAF. The poster said he found himself blind copied into the message, which was sent to the board at 12:30am.
"This Board has allowed Brian Farrell, the CEO, the ongoing ability to take a cash-rich profitable company and drive it from a $30 share price down to around $.70 without acting, despite numerous mistakes," states the anonymous letter.
It blames THQ's reliance on a formula of snapping up popular licences and making the games cheaply to bring in revenue, spending on studio acquisitions, and investment in the uDraw tablet, all overseen by Farrell.
"Millions and millions of dollars were wasted on acquiring licenses at the same time the kids, family, casual business was declining at a rapid rate. Instead of slowing those acquisitions he overpaid for more of them until again cash was wasted in paying for brands that didn't sell well anymore."
The writers say these mistakes are at the root of recent layoffs, and lay all the blame at the feet of the management team. It then goes on to list the salaries for that team, including Farrell, Martin Good, Ian Curran, and Ed Kauffman, and listing their specific failings.
When contacted by GamesIndustry.biz THQ would not comment on the letter or its contents.
"We've watched the stock from the outside and read the comments and the reason why the company is valued so low despite its sales is because of this under-qualified management team," ends the letter.
"Board it is time for you to act before your names are added to the list above of things that must change."