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THQ Postmortem

MCV outlines what they call "the full story" of the collapse of THQ, the game publisher/developer that was just broken up due to bankruptcy. They hear from Jason Rubin, who served as president of the company during efforts to put it back on course, and he is frank in saying the made "massive mistakes," and that: "There are certainly things to be said about challenges in the mid-tier triple-A publishing business, but I don't think that conflating it with THQ's experience is helpful." Here's a bit of his take on what went wrong:

Unfortunately, the mistakes that were made long before I joined, like the incredible losses attached to uDraw, massive wasted capital in the unpublished MMO that was cancelled, sticking with children's and casual titles far after mobile and tablets had killed the business, bad, late, or otherwise inferior titles like Homefront, and a generally haphazard and inefficient approach to deal making, left the company with too much negative hanging on its books.

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31. Re: THQ Postmortem Feb 1, 2013, 14:03 killer_roach
 
Beamer wrote on Feb 1, 2013, 13:52:
Why would a venture capitalist give money to a video game company when it can go to a safer investment?

Typically those are the sorts of investments VC will go after, although the best ones also correlate downside risk with upside risk. If there's a good chance they could lose everything backing a game... they want the potential there to make them ludicrously wealthy. High alpha means high expected returns to capital in the VC world.

Your point about risk distribution is also a good one, and it's something where the large publishers truly excel. Not only do they have multiple baskets to put their eggs in, they're all different types of baskets - you have some core titles in various genres, you have a few licensed titles, you have some toes dipped in the digital distribution waters, you have some mobile games, some long-tail plays, some budget titles, maybe some F2P titles, some merchandising of your properties, perhaps a couple of funded indies in the hopes of finding the next big thing (in the best cases, ones that could just about fund your next AAA tentpole title)... it's all a game of hedges. If one goes down, another (hopefully) goes up.
 
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