Digital revenues double ahead of THQ restructure

Change is afoot at THQ. The company has withdrawn from the children’s market and plans to focus instead on "core games and digital initiatives".

And despite losses of $56m, it has plenty to work with – the publisher revealed that digital revenues for the third quarter of fiscal 2012 have more than doubled year-on-year.

Similarly, revenues from online and downloadable content for the nine months ended December 31st, 2011 were up by 81 per cent.

A key sales driver has been Saints Row: The Third, which THQ expects to become its highest-selling DLC title ever. It is already the publisher’s biggest owned-IP launch in history.

In light of these strong results – and the failure of family franchises such as the now discontinued uDraw – THQ is implementing plans to streamline its organisation and cost structure to become a smaller company with sustained profitability. Reports emerged earlier this week that this will require mass layoffs.

"We have concluded an extensive review of our operations to realign our business, focusing on our key franchises with the most potential," said THQ president and CEO Brian Farrell.

‘We are implementing a plan to bring costs in line with our lower anticipated level of revenue. With our focused product plan, leaner cost structure, cash balance and existing credit facility, we believe the company has adequate resources to execute on our plan and deliver on our strong multi-year pipeline of games."

The company estimates that the reorganisation will see a reduction in selling, general and administrative expenses of around $60m and in product development expenditures of approximately $100m.

THQ is readying a 17-game rescue plan to secure its future with core gamers up to 2014 and beyond.

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