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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  1. PC Monster says:

    “I thought it was a fire breathing star-goat?”

    :) Been a while since I read the books. Also, typing in a hurry.

  2. PC Monster says:

    Ian: “…everyone remaining on the planet succumbed to a virulent disease spread by telephone handsets.”

    We had that – it was called “The Annoying Thing”. A-ring-ding-ding-ding-ding….etc.

  3. dsmart says:

    @ Xercies,

    The gaming public is already embracing indie and smaller budget games. The biggest threat is the marketing blitz that the publishers put behind their higher costing counterparts.

    Basically, thats why marketing takes such a front seat in the gaming biz because at the end of the day, its usually nothing more than a blitz – and a partial snow job – to get a game recognized and in the forefront. For most of these games, the marketing costs (added to the already bizarre dev costs) usually end up costing more (yes, believe it!) than the game’s dev cost. When you have that kind of money at stake, you put the fate of the product in the hands of marketing.

    Thing is, even with that marketing blitz, games still tank. But a tanked triple-A game sells tons more than any indie game will see in its entire run, if not lifetime. Thats what we’re dealing with.

    And gamers – by their very nature – like bling, bright lights and things that flash with pretty lights. So when you start talking indie game, they give it a squint – and once in awhile actually buy it. You put that awesome indie game right next to any recent derivative triple-A bullshit and I’ll bet a stack of dimes that the indie game won’t stand a snowball in hell chance.

    Also, there are indies and then there are indies. The former are guys like us, Iron Clad etc with the sub-million dollar dev costs and who cater to a different echelon. Then you have the latter in guys like Braid developer J. Blow who can get by with around $200K or so.

    Even Microsoft has gone on record and said that an XBLA title to be profitable needs to be less than $200K or so to develop. That just goes to show you the target market they were shooting for. Braid cost $180K. My upcoming All Aspect Warfare title – which, believe it or not has only two primary (myself and Sergio) developers, two support developers and less than ten contractors (audio, assets etc), will be encroaching on the $2m mark by the time it completes later this year. If the PC version (due out in April/May) slips and thus causes the XB360 version to slip and go to MS cert late, by the time that all gets sorted out, we’d be staring suspiciously – and in coma inducing panic – at the $2.5m mark.

    I don’t know what something like Legions over at Instant Action cost to make (IIRC, Iron Clad’s SiNs cost less than $500K to make), but when you look at those titles, you have to ask yourself if $30m budgets are the only way to attract gamers. Its not. So why do publishers do it? Fuck if I know. All I know is, someone gave me $30m to make a game, I’m going to spend less than $5m on it, buy myself an island – or a small country – and retired. Either that or I’ll stick around and make ten games.

  4. Gap Gen says:

    Yeah, success for a sub-$1M developer is significantly different from success for a multi-million dollar budget game. I guess once you go down the big-budget route, it’s difficult to extricate yourself without shrinking as an organisation, since you require a certain revenue in order to survive. And the shareholders might not like the idea of radically shrinking a company without some serious shit going down.

    Interesting to hear that the marketing costs more than the development costs in some cases, though.

  5. Larington says:

    Yeah, i’d figured a company might spend up to 500k on marketting but hardly more than the games budget itself. Thats, well thats worrying in a sense. How many of those games needed that kind of marketing mullah and of those, how many could’ve gotten that marketing impact with more cost effective methods like viral marketing instead of expensive methods like TV advertising?

  6. dsmart says:

    It is widely known that marketing a triple-A usually costs higher than the game’s dev costs or matches it. This is no big secret, so there’s nothing to wonder about.

    As I said, game marketing is a blitz.

  7. Man Raised By Puffins says:

    RON is the single best rts ever made

    You know there’s something wrong with you when the first image that particular three letter acronym conjures, even when used in the context of a comment on a post about the developers of Rise of Nations for crying out loud, is of ‘RON, the PCG It’s All Over TRON pastiche with Kieron in the glowing neon get-up. *scrubs brain*

    With regards to the actual topic in question: Not a big RTS fan, but it’s never good to see a well regarded dev go down the tubes.

  8. unclelou says:

    Damn.

    THQ was my favourite PC publisher in the last couple of years. Relic’s games, Stalker, Titan Quest. Really don’t want them to change their publishing policies too much.

    That said, I wasn’t aware they owned Big Huge Games. Rise of Nations was awesome. One of the top 10 RTS games.

  9. Gorgeras says:

    It might help if you all go look at some of the console games THQ have been wasting money on. Seriously, there’s loads of generic crap I’ve never heard of in the PS3 and 360 section of my local Gamestation with THQ’s logo on them.

    The company has suffered from a catastrophic lack of self-criticism and is punishing a good studio for it. If the stupid fucking shareholders knew anything about games, they’d demand the heads of the entire board now. Studios can be slimmed down across the board without removing any single one entirely, so they keep the projects going. If it’s the projects themselves which are costing so much money, then obviously they shouldn’t be getting rid of the one most likely to make them any money this year. For some reason THQ/Relic brought out a pretty crappy army game for the consoles and I have to wonder why any time was wasted on it.

    Relic have lost the magic touch; if there are any cuts, THQ should look there first. It again comes down to a severe deficit in self-criticism. Dawn of War 2 was multiplayer mass-suicide when everyone knows RTS games thrive on their multiplayer unless they have an enjoyable sandbox like the Total War series.

  10. SwiftRanger says:

    DoW II is good enough (especially in multiplayer if you get a game going), as are most of THQ’s PC games, it’s just not polished/finished (again, this is the case with every major PC title now, even the blindly praised ones such as Empire or L4D).

    This bad news is not a surprise if you see what THQ was publishing with junk like Juiced some time ago. Their licensed games (kids stuff and wrestling) didn’t bring in as much money either, Volition’s portfolio has been utter shit after Freespace 2 and I keep on being baffled how they’re still seen by everyone as a top studio.

    THQ had to establish several new IP’s over the years as well (SupCom, CoH, Frontlines, Titan Quest), all of which aren’t receiving a sequel (from THQ) btw so they lose opportunities to cash in on the hype.

    I am curious as to whether Kaos Studios wouldn’t have to be closed.

  11. Heliocentric says:

    Rolling towards the end of a degree (mainly programming) the only kind of development which has any attraction is part time web game development as a hobby. 3 years ago i wanted to get a position in a games company, but i got better.

  12. dsmart says:

    @ SwiftRanger

    The jury is still out on Kaos, but since fp games are the rage – my guess is that they’re probably going to get a stay of execution in this round. Frontlines didn’t light up any charts and thats got be part of the sting that THQ got.

  13. Smurfy says:

    I’ve never heard of them or any of the games they’ve made except Age of Empires III but I thought there were only two.