THQ Big Huge Losses = Losing Big Huge Games

By Kieron Gillen on March 18th, 2009 at 12:46 am.

I thought it best to post this quickly before disappearing for the night. Following rumours earlier today THQ have confirmed that Big Huge Games are for sale. Or rather they’re going to close the studio if a sale isn’t completed in – to quote what THQ’s Julie MacMedan said to Crispy Gamer – the “near future.” This is part of their plans to cut $220 million in costs after nearly $200 million losses in Q4 last year. Creators of Rise of Nations and Rise of Legends, if this is actually the end, it’ll inevitably be a big huge loss for gaming.

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63 Comments »

  1. wyrmsine says:

    Not sure if this has been posted here yet, but THQ to cut 600 jobs. That there’s a lot of games flushed down the tubes, and for the people left, the pressure to create a surefire hit would be unimaginable. Probably not the best dev environment…

  2. Sagan says:

    Big Huge Games hasn’t even released a title for THQ yet. They just got acquired last year.
    And the other two studios get turned into indi-developers. Why close down BHG?

    This is just wrong.

  3. Tworak says:

    console kiss of death.

    *bails out*

  4. EBass says:

    Well its more Relic than THQ, but Company of Heroes is a THQ published game and their support and design of the expansion was terrible and warded me off DoW2 and Tales of Valour, serves em right.

  5. drewski says:

    It’s always a shame when a badly managed company takes out talented people through being greedy and stupid.

  6. Rich_P says:

    I hope Big Huge Games finds a good home and continues making awesome PC games. Wonder if Stardock has some extra cash sitting around :P

    Anyway, it’s shocking how the videogame industry is bringing in record revenue but still bleeding money due to mismanagement and/or ballooning developments costs. Hell, Take-Two posted a $50 million loss despite GTA IV selling 13 million copies…

  7. Dreamhacker says:

    NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO!

    What will happen to the BHG RPG now?

  8. apnea says:

    Rise of Legend was great, up to a point (third part). Rare fantasy of the imaginative kind.

    Anyway, sad news.

  9. vinraith says:

    Rise of Nations is still the best RTS game I’ve ever played, hands down. I dearly hope Big Huge games finds a home that properly appreciates their talents. I’d love to see a sequel to RoN (and no, Rise of Legends doesn’t count).

  10. Wacky says:

    @EBass are you punishing Relic and not buying the excellent DoW 2 and ToV because of THQ?I don’t really understand what you’re saying.

    BHG was awesome while it lasted,RoN and RoL we’re amazing,too bad they haven’t gotten the chance to make RoN 2 or RoL 2 :(

  11. Turin Turambar says:

    I was one of the few to like Rise of Legends. :/

  12. Trithemius says:

    RoL was good times, and the prospect of the BHRPG being vapourware fills me with dismay!

    I was really looking forward to a new Ken Rolston-style game!

  13. Heliocentric says:

    Corporate types who see the world in short term profits. These are the bosses in most companies, i hope bhg’s all at once demolition allows it to reform elsewhere. Better than being strangled into a team merger and then sacked (old ea style)

  14. Homunculus says:

    This is Brian Reynolds’ of Brian Reynolds’ Sid Meier’s Alpha Centauri fame lot, who were working on a new RPG with Morrowind big brain Ken Rolston, yeah?

    Hope someone continues to fund its development, would be interesting to see what shape an American RPG that didn’t originate from the usual big / medium budget suspects (Bioware, Obisidian, Bethesda et al) would look like.

  15. Gap Gen says:

    Rise of Nations did some amazing things for the RTS interface. I didn’t buy Age of Empires 3 purely because I expected it to have learnt all the things that Rise of Nations did properly, but it learnt nothing. Shame.

  16. Ecko says:

    Sometimes you guys can act like right little daydreamers.

    A company needs to make a profit for it to continue existing…It’s not like they have some moral duty to bleed themselves to death to make a game, or we’d have no games to look forward to!

  17. Heliocentric says:

    Who are you pointing that smug-cannon at? Its the death of a team which produced games so elegant as games they were art. Not visual or aural art but actual mechanical art.

  18. phil says:

    @Ecko – I believe the criticism of THQ was directed at their short-term thinking, to make a profit companies generally require talented and innovative developers. It would have been better to hack off a few branches of middle management rather than loose a developer with an excellent trackrecord with original IPs.

  19. marilena says:

    The issue isn’t that they’re trying to make money, but that they’re bad at it.

    Just look at their solution for becoming profitable after they had losses of 200 millions. They’re simply cutting 220 millions worth of expenses, mostly by firing people.

    That’s not exactly the pinnacle of human thinking, is it? A 10 years old kid could have come up with that (and by replacing the manager with a kid you already cut around 10 million dollars worth of expenses, as his wage demands wouldn’t go above “lots of cake” and “a big TV”; too bad that managers will never fire themselves).

  20. Heliocentric says:

    Except in japan, they love standing down in japan, its endemic.

  21. Gap Gen says:

    @marilena: Actually, you say “lots of cake” and “a big TV”, but looking at Big Huge Games’ jobs page:

    “We’re proud of our creative environment which includes fun office perks such as…

    * Pool table
    * Ping pong table
    * Full-size bar (modeled after a local Irish Pub)
    * Arcade machine (100′s of classics installed)
    * Free drinks (sodas, tea, and freshly ground coffee via three fancy latte machines)
    * Biometric hand-scanner (Physical office keys? That’s so twentieth century.)
    * Console gaming area (PS3, 360, and Wii)
    * Continuously updated Game Library stocked with 100′s of titles available for borrow anytime
    * 150 gallon saltwater aquarium”

  22. Heliocentric says:

    No cake

  23. Gap Gen says:

    Maybe they have cake beer.

  24. phil says:

    * 150 gallon saltwater aquarium” – A work environment that can finally be combined with my love for my dolphin life partner? I’m there and I should stand a fair chance as the way I hear it they’ve suddenly had a lot of spots open up there.

  25. Xercies says:

    I think the whole videogame economy is really screwed and backwords.

    THQ having a loss even th=hough there GTA 4 sold millions. Spore not getting enough money even though it sold millions.

    Can anyone see that this is really wrong.

    But no the Managers get all the money because they are managers leaving the people that actually do all the work fired. And this just doesn’t happen in th e games industry it happens everywhere in business.

  26. PC Monster says:

    They’re proud of a biometric hand scanner? This is classed as a ‘perk’?

    These people really need to get out more.

    I didn’t like Rise of Legends. I borrowed it from a friend who recommend it to me – “You’ll love this” – but found myself completely unmoved by it. However, having had a brief glance at Rise of Nations, I could imagine me having quite a good time with that one. I’ll pop it on the list of games to track down on eBay.

    Oh, and having lost my own job recently, I sympathise with anyone else losing theirs, particularly if they have such obvious talent.

  27. Will Tomas says:

    Corporate types are horrible short-termists. I can very definitely relate to this one. The sale is probably just a cover for closure in cases like these – they don’t want to look like they’re just closing it and want to try and make some money for it if they can – but that’s what it means. Very silly. Very short-term. Huge loss.

  28. marilena says:

    @ PC Monster

    Unfortunately, Rise of Legends is not a good measure of the studio’s quality. They tried to use a more original setting, but they ended up making a very muddy and hard to get into game. By all accounts from people who managed to ‘get it’, it’s a good game, but not many people succeeded. I certainly didn’t. I tried the campaign, but it was slow paced and dull. I tried skirmishes, but those threw the game’s entire overwhelming complexity in my face, so I got lost. I didn’t try multiplayer, as it would have meant being destroyed by people who understood it better.

    But do play Rise of Legends. It’s a landmark in the RTS genre and in my opinion one of the finest games ever made. It went so far beyond the likes of Age of … or Empire Earth that it rendered them all obsolete. It truly is great. If you like the genre, you owe yourself to play it.

  29. PC Monster says:

    Thanks for the recommendation, Marilena. And for listing exactly the reasons I didn’t like ‘Legends. I did find the opening levels of the campaign astonishingly dull to play.

    I surprised myself some years ago by hugely enjoying GalCiv and its fabulous sequel – previously I believed myself bereft of the patience to enjoy such time-consuming games, which is probably why I passed over ‘Nations on its release. but having just purchased Alpha Centauri I find myself in the mood for more intricate, large-scale strategy games. I’ll give the demo a try when I get home. :)

  30. SirKicksalot says:

    It’s hard only to get used to the setting of RoL, since it’s not the usual elf/ork/bollocks fantasy.

    They streamlined the interface as well as it’s possible, there are a million tooltips that explain everything, the tutorials are well implemented… but, as always, people are turned off by something new.

    If you understand RoN, it’s impossible not to understand RoL. It’s one of the finest and most balanced RTS games ever, up there with StarCraft.

    But it was rushed. Microsoft insisted that it would be launched during E306. It seems that BHG focused on polishing the gameplay aspects until the deadline, and the technical aspects were ignored. It was a total mess, especially in the sound departament. The patches fixed it later, but the first impression and the horrible demo turned off many people.

    It bombed really hard, only 20000 copies were sold. And you know there’s something wrong with reviewers when you see phrases like “This wacky mish-mash of real history, Dungeons & Dragons, and Chariots of the Gods is damn hard to warm up to.”

    Makes me think that if StarCraft was released today, it would score no better than Halo Wars.

  31. rocketman71 says:

    The stupid suits are going to kill another great company again. Just great.

  32. Klumhru says:

    I get the feeling that games production, as far as the PC goes at least, will move gradually into making a few large budget games per year, leaving most of the innovation to the indies in their low-overhead micro-studios. Move back in time that is, to when games were made by 5-15 man studios.
    This has already started to happen as far as I can see with large publisher-developers consolidating and cutting down overheads. The fact that they seem to be cutting the production capability strikes me as somewhat dumb, but then these are suits we’re talking about. The worth of the companies does not lie in the management skills (lol?), but in the brains of their developers, artists and designers. Firing these people seems like the last thing they should be doing, but they’re not gonna fire themselves are they?
    The name games are concentrating on production values over content and playability, relying on the “wow” factor to sell their games but sacrificing longevity. A glaring example of this is HAWX, a game with zero innovation but looks incredible. Why this game was released at all on PC is nearly beyond me. The only reason I can see is that it was developed primarily for the X360 and therefore the code-base will run mostly unchanged on PC hardware. They might as well, but I don’t see how they’re gonna sell a lot of copies on our platform.
    This works for the younger crowds PC-wise, but those aren’t the ones making the buying decisions. For the PC, I believe the buyers are people in their mid-twenties to mid-late thirties, who have already played every prototypical game out there, and the games being made now simply don’t interest us.
    We have financial responsibilities, families, mortgages and are not going to be constantly upgrading our rigs to play the latest shiny games. We want new interesting experiences we can enjoy on the existing home computer(s) without any hassles.

  33. dsmart says:

    @ Xercies

    It has been screwed up for quite some time. They’re paying the execs a ton of money to make it work. But somewhere, in between cooking the books and screwing the pooch, they haven’t yet wisened to the fact that if you spend more to produce a game, you have to sell tons more to make that money back.

    When a company burns $30m on a game and the company’s burn rate is $100m a year, it stands to reason that you either (a) make damn sure the game sells or (b) starting reducing the cost of making games.

    I can’t imagine ANY multi-platform game costing more than $8-15m to make. These budgets are inflated because companies just seem to think that the more bodies (which subsequently cost money) you throw at a game, the better it will be. That, of course, is rubbish – as witnessed by the tons of high profile “triple-A” (lol!!) tripe we’ve seen released and tanked.

    Banking on one or two trick ponies when you have a high burn rate, overstaffing and underperforming studios is a sure fire way to go out of business.

    Just watch what happens if Red Faction tanks in Q2.

    They have absolutely nothing in the pipeline that is going to cauterize (fuck, you spell it with an s then) the wound any time soon and they know it. Just so happens that RFG comes out in June. So by doing these cuts now, they can seem – at least to investors and the wino down the street – that they’re on their way to profitability.

    Apart from those brave and hard working souls who lose their jobs when upper management make boneheaded decisions, I won’t shed a tear for any video game company that is struggling or going out of business because their wounds are all 100% self-inflicted.

    They should start by firing the entire upper management and putting the gaming making biz in the hands of the producers, designers and developers – not the hands of upper management and marketing.

    This is the only business that I can think of where marketing has more pull and influence on a game, than the very people who are actually making it. Absolutely amazing to me. Yet, when the game tanks, marketing people don’t get fired or blamed. Oh no, not them!! Instead, the guys making the game take the fall and all the blame.

    Why are smaller companies surviving and still in business, year on year, while these bigwigs are the ones posting massive losses, layoffs etc? Think about that for a bit.

    THQ is going to be either done and out or in an even deeper hole by fiscal year 2010 (or thereafter) because it is going to take a miracle of mariah proportions to keep them afloat. Just ask Eidos, Atari etc. You can cling on for as long as you want, but all you’re doing is delaying the invitable. And that delay, in and of itself, costs money.

    The video game business is going to slowly sink back into the realms of smaller, tighter groups (even studios within large companies) making games on minimal – and workable – budgets.

    And of course the troubles at EA aren’t done yet. From the looks of their slate, there is more – much more – trouble to come.

    Let all just go back to the nineties when making a game costing more than $2m required the CEO to walk around with an Oxygen tank from all the anxiety of Green lighting such an amount for a single game.

  34. pkt-zer0 says:

    I enjoyed RoL immensely (more so than Starcraft, even), was looking forward to their RPG as well.

    *insert gigantic sadface here*

  35. Larington says:

    Its a kind of black comedy really isn’t it, that in order to save money, they cut the stuff whose work is supposed to make you money.

    Like showing a picture of a wookie in a courtroom, it doesn’t make sense!

    Its a fools hope (Sometimes thats all we have), but Codemasters occasionally comes along and snaps up development studios under threat of closure, maybe they’ll do it this time as well.

    Yeah, I know, a fools hope.

    Prior to the emergence of the latest gen consoles, there was a point where all the games development magazines I read were saying “How are we possibly going to fill 100 positions on a development team?”, I’m still CONVINCED they were asking the wrong question.

  36. Klumhru says:

    Additionally, when the studios lay off their production departments, they are only creating competition for themselves in the form of independent studios made up of their former employees. It’s not like it’s hard to find a couple of economists or MBAs to fill up the paper pusher posts in a new companies.

  37. dsmart says:

    @ Klumhuru

    A glaring example of this is HAWX, a game with zero innovation but looks incredible. Why this game was released at all on PC is nearly beyond me. The only reason I can see is that it was developed primarily for the X360 and therefore the code-base will run mostly unchanged on PC hardware. They might as well, but I don’t see how they’re gonna sell a lot of copies on our platform.

    Looking incredible? Are you kidding me? Or do you just close your eyes when you’re below 5K ft AGL?

    Sure it looks “nice” here and there but “incredible” is not the word I’d use to describe it. Heck, it doesn’t even look half as good a Ace Combat 6 – which is over a year old almost.

    Most if not all XB360 game dev takes place on the PC. The only reason not to release an XB360 title on the PC is if you don’t care about the residual income. Large companies these days with console titles, regard the PC platform as a residual income stream. I don’t care what they way in public – behind closed doors it is a whole other story.

    In the case of HAWX, the game was developed outside of the US and thus automatically cost about 50% less than it would cost to make here. So with those reduced dev costs and the fact that whatever sale you make on the PC can still pay for “something”, it makes sense to release it on the PC.

    HAWX on the PC reminds of the travesty that was the last Gunship title by Microprose or that much touted Top Gun game by Activision. You automatically lower the bar and so the games tank spectactularly.

    HAWX on the PC won’t even be a bleep on anyone’s sales radar because if you’ve done your homework or played the demo there is very little incentive to buy it. Then again, there is a dearth of flight combat games on the PC, apart from the hardcore ones like Black Shark etc. So maybe they’ll prove me wrong. But from the standpoint of a hardcore gamer, the game is derivative, sucks and has zero redeeming qualities.

  38. Klumhru says:

    @The Doctor

    Agreed, on further consideration, ‘incredible’ might be a bit over the top to describe it.

    The fact that all 360 development takes place on the PC was exactly my point. You might as well release on PC, if only to snag the more oblivious and starved consumers in the PC flight combat market. I played the demo just to be able to make an educated observation on a game whose existence I’ve been lamenting for a long time now. Buying it never really occurred to me.

    OT, I regret the looming demise of BHG, as RoL felt like their second album, following their excellent RoN that I played to death. The third album would have been very interesting to see.

  39. PC Monster says:

    “They should start by firing the entire upper management and putting the gaming making biz in the hands of the producers, designers and developers – not the hands of upper management and marketing.”

    Bill Hicks had some choice things to say about Marketers/Advertisers.

    “Oh, and if anyone here works in Advertising: kill yourself.” No, seriously. There is no excuse for what you do: just kill yourself.” (to paraphrase)

    And I loved Douglas Adams’ solution to middle-management – fire them into space on a B-Ark on the pretext of saving them from an invading space dragon. Priceless. :)

  40. Gap Gen says:

    Well, one way of firing upper management is by Big Huge buying themselves from THQ, if such a thing can be done.

  41. phil says:

    Considering the amount of hate middle managers and marketing types are getting – which seems fair enough, if you’ve read things like the EA wife story – is there anyone here working in one of these posts? Care to justify yourself?

  42. Matt says:

    I’m not sure where all the vitriol is coming from for THQ. They HAVEN’T been making money. They don’t have any choice but to slim down. Although BHG should be lauded for their ambition and talent, at the end of the day it’s all business. THQ simply can’t afford to hold as many studios as it can. If it doesn’t slim down, than THQ goes down that drain, which means MORE studios lose out.

    As a comic book fan, trust me, I know how much it sucks to lose creative team from a publisher because, although the product is artful and engaging, the business simply isn’t there. BHG has not made any money for THQ.

  43. SirKicksalot says:

    BHG has not made any money for THQ because they didn’t have the chance to make them. It’s only a year since they’ve been bought, their RPG is still in production. It’s unfair.

  44. Tei says:

    “They should start by firing the entire upper management and putting the gaming making biz in the hands of the producers, designers and developers – not the hands of upper management and marketing.”

    If you fired upper management, you still need upper management. The producers, designers and developers can take busines decisions. Maybe we have here people hating the Doctor, and not the sickness. Is hard to be uppermanagement, If you think is that easy, just try yourself to manage a enterprise. Maybe you are very good at producing the best game ever. But Is not enough withouth other stuff, like enough advertising. But the more important skill for management is the cojones to take decisions. Not everybody is as crazy as management need. People that take ages to take decissions are useless for management.

  45. aldo_14 says:

    And I loved Douglas Adams’ solution to middle-management – fire them into space on a B-Ark on the pretext of saving them from an invading space dragon. Priceless. :)

    I thought it was a fire breathing star-goat?

  46. Ian says:

    @PC Monster but if you recall, shortly after the Ark B was sent into space (containing not only middle managers but also hair-stylists and telephone sanitisers) everyone remaining on the planet succumbed to a virulent disease spread by telephone handsets.

    As a disclaimer, I am technically middle management where I work (not a software house, thankfully). The only thing I can say is that this is more or less the inevitable consequence of consolidation in an industry, especially during an economic downturn. As a publicly-listed company, THQ’s management answer to the shareholders (typically large pension and investment funds). If the shareholders don’t get the dividends they want, they change the board. Current board members are going to be looking at which parts of their business are haemorrhaging money and which parts are actually bringing in revenue. It’s (I suspect) an ‘easy’ decision to make in such circumstances: “Do I shut you down now and save X, or do I keep you running at a loss hoping that you will eventually come good in some future financial year when I’ve probably already lost my role on the board?” They have plenty of other titles in development, so they shed the ones that are furthest away from complete/most likely to sell well.

    No, it’s not fair. But this is the situation that the bigger software houses have got themselves into, largely driven by the market’s need/desire for triple-A titles that cost umpty-thrumpy millions to produce. Someone has to bankroll that development and it’s typically a large publisher like THQ. Until a game ships, it’s just a money pit for them.

    Hell, I’m all for more creative/innovative games and people losing their jobs is bad in a strong economy, doubly bad at times like this, but until the development side of the industry has some different funding models to pay for a two/three-year project this strikes me as how it’s going to be.

  47. Larington says:

    In truth, the real problem lies with the system of stocks and shares, its a constant distraction from the main goal of a business – To provide goods/services that people are willing to pay for.
    The vast majority of shareholders right now are too busy crapping their pants to take any of the risks that would help a company pull off stratospheric success and its been that way since long before this recession took hold.

  48. A-scale says:

    RON is the single best rts ever made, and I play it online to this day. RoL was a disappointment but the vinci were pure artistic genius.

  49. Xercies says:

    @dsmart

    You make a lot of sense there.

    I just don’t think the public would like to go back to the 10-15 people making games. You see we may say indie games are great and whatever but the general public like ther Gears of War 2s and there GTA 4s and once they see those budgets they want more money to be pored in so it looks good. So you’ll see it will get a lot worse before it gets better.

    But there will become a time where the public can accept indie games and lower budget games. And even though it pains me to say this, The wii is leading the way for this.

  50. dsmart says:

    @ SirKicksAlot

    Exactly. Which begs the question as to why they bought BHG in the first place. Its not like they were rolling in dough when they made that purchase in the first place.

    @ Tei

    Of course you need upper management. Who said otherwise? Making games should not be in the hands of upper management or marketing.

    So naturally the under performance of their titles since then, has led to the state they’re in atm. And as Ian said, they have a lot of investors to answer to. And when it is time for the axe to fall, it is usually underperforming (in most cases) properties/studios that get the axe.

    In the case of BHG, obviously THQ regard them as a growing concern and so decided to cut them loose rather than keep putting money into them. Sixty days to sell a company is quite short. So my guess is that it is probably going to be a fire sale if someone (Namco, Square Enix etc) wants to buy a Western studio. My guess is that they’re not going to find any takers in this climate. So only companies looking to invest in Western studios is probably going to blink and see what is on offer. Maybe Sega will pick them up, who knows.

    Working with – and for – big publishers is going from bad to worse and very – very – quickly. Once making games became a full fledged business in which the fun of making games takes a back seat, it was all over.

    Think about this. Demigod – from a pedigree developer – ended up at Stardock, instead of at the original publishing giant that launched them.