Naughty Dog’s Co-Founder Could be THQ’s Savior

 Naughty Dogs Co Founder Could be THQs Savior

As it prepares to make a move to avoid a NASDAQ delisting, THQ yesterday announced some changes to its executive team. Core Games EVP Danny Bilson, who has helped to push the publisher in its current direction of focusing on wholly-owned IP is leaving the company along with Core Studios SVP Dave Davis. While Bilson’s departure could have been a bad sign for those who view THQ‘s direction as promising, the newly-appointed president of THQ is someone who knows his games: Jason Rubin, the former co-founder of Naughty Dog, has assumed the role effective immediately.

THQ is not in great shape, due in large part to the failure of the high-definition versions of uDraw released last fall. Layoffs have struck the company in the past year, and back in January it was rumored that its slate of 2014 games had been canceled. This turned out to be untrue, although since then we have learned its Warhammer MMO, Dark Millennium Online, will be converted into a more traditional style of game, and that it is trying to sell off Devil’s Third, the game from Tomonobu Itagaki‘s new studio Valhalla Game Studios.

Its stock price has been dwindling for years; in 2007 its share price topped $36, a monumental difference from its current $.63 price that threatens to see the company’s common stock delisted from the NASDAQ Global Market. The company needs the value of its stock to reach at least $1.00 for 10 consecutive days to avoid this fate. (The current plan appears to be a reverse stock split, which will see the number of shares in existence reduced, thereby increasing the value of what stock remains.) Matters weren’t helped when it announced earlier this month that, despite an increase in revenues, its losses grew in the 2012 fiscal year.

 Naughty Dogs Co Founder Could be THQs Savior

While Rubin being named president did not have a significant effect on the value of THQ‘s stock, his appointment does bode well for the future. Along with Andy Gavin, Rubin founded Naughty Dog in 1986. He was a key player at the company for nearly two decades, helping to create the Crash Bandicoot and Jak and Daxter series before leaving in 2004 (three years after Naughty Dog was acquired by SCEA). Since then he has worked on comics and was a co-founder of Flektor, a tool allowing people to mashup various web content.

As THQ president, he will report to Brian Farrell, who remains the CEO and chairman, and will be in charge of worldwide product development, marketing, and publishing operations, giving him a lot of influence over what sort of games we’ll be seeing THQ‘s name on in the coming years. His influence might not be greatly felt as far as which games we see come out short-term, both because cash is expected to be tight and because the wheels are already in motion for games coming out in the near future: Darksiders II, Saints Row: The Third – Enter the Dominatrix, Company of Heroes 2, Metro: Last Light, South Park: The Game, and WWE ’13. Further out, THQ still has Insane from Guillermo Del Toro, Homefront 2 from Crytek UK, and a new franchise from former Assassin’s Creed creative director Patrice Désilets.

Given Naughty Dog‘s track record with Rubin in charge, he is likely to be a major advocate for the direction THQ is headed in of focusing on wholly-owned IP and shying away from kids’ licensed games and products like uDraw. Merely saying a company wants to focus on those kinds of core games is one thing; Rubin, having seen what it takes to establish a successful franchise more than once, should be a major asset in identifying the ideas that can help to bring THQ back into the black. (Maybe he’ll find a way to revive Red Faction like, say, bringing it back outdoors.) Even with the new franchises that have already been green-lighted, like Désilets/THQ Montreal’s new game and Insane, his expertise could come in handy in ensuring those games turn into something special, rather than seeing another repeat of Homefront.

OP-ED: Things Could Be Worse for THQ

 OP ED: Things Could Be Worse for THQ

THQ is not in the greatest position it’s ever found itself, what with it facing a potential NASDAQ delisting and its lowest stock prices since the mid-90s. Earlier this year there were rumors the publisher had canceled its entire slate of 2014 games, including its MMO Warhammer 40,000: Dark Millennium Online. This was quickly denied, although the company has laid off a large number of employees since then in an attempt to restructure its business.

Part of that restructuring includes changing Dark Millennium Online from an MMO into a more standard style of game. As described in the press release late last month, it will now be developed as an “immersive single player and online multiplayer experience with robust digital content, and engaging community features.” That sounds nice and all, but the idea of converting your typical World of Warcraft-style MMO into a game that can be enjoyed by a single player is a tall order. According to the company’s executive vice president of core games, Danny Bilson, it won’t be a difficult conversion due to the innovations developer Vigil Games (which lost 79 full-time employees last month) had come up with.

“Yes, and the reason is that there was a lot of innovation in that game,” Bilson said when asked by RipTen if work done on the MMO would be usable with the game’s new direction. “In particular, the shooting mechanics are real-time, not turn based. The content is absolutely incredible, and any time anyone ever had any doubts about it, all I had to do was bring them into the room and show them progress on the game. So there’s a tremendous amount of content that was built. At its core, the mechanics are very action based. Nobody has seen this before. We’ve never shown it to anyone. The team is incredibly excited, and this is the truth, about the new direction for the game.”

He declined to get any more specific than that, though he said there is a lot he knows about it considering it’s been in development for five years. The only reason for this “shift” from the MMO model, as it was described in the press release, is because THQ was unable to find a partner to help back it. One would think if it was as innovative as Bilson would have us believe, companies would be lining up to back it. Bilson explained the lack of backers was due not to the quality or innovation found in the game, but the current shape of the subscription-based MMO market, which does feel like a fair point.

“That’s what we were building: a big, ideally subscription-based, MMO. I can tell you that, unequivocally, certain people who have shipped MMOs, who saw this…” Bilson said. “A quote was, ‘That’s better than anything we’ve ever built.’ That’s a quote from a room I was in, and that’s what kept the conversations going. There was a lot of, ‘How do we make this work economically, because it’s awesome?’”

As you’d expect him to under the circumstances, he said he prefers not having outside investors because it means there is no pressure to compromise the developers’ vision. “That game is still sitting with the people who invented it five years ago, and honestly, they are incredibly excited about the new direction,” he said. “That is the absolute truth, and when we announce it, and you speak to them, they’ll be able to tell you themselves. You’ll really like it. If you liked Space Marine [pictured above], you’re gonna love this thing. It’s much deeper. Space Marine was designed as a console experience. This one has tremendous multiplayer gameplay, and there is a lot going on in this game that’s spectacular.”

We’ll have to rely on his word for now as he said THQ doesn’t plan on talking about the game “for a while.” With the company needing to convince investors it has something big in the works, you can be forgiven for being hesitant to believe the overwhelming positivity about anything we can’t see firsthand. Likewise, the track record for companies suggesting an MMO would be innovative is not especially great; more often than not, ‘groundbreaking’ features turn out to be subtle tweaks on what MMO players have been playing for years. There is, however, reason to believe DMO will be something special; the fact that THQ is at a point where it’s trimming down its number of releases and has decided to continue working on the game (probably for upwards of another two years) would suggest it does legitimately have faith in it turning out to be a good game. Then again, it also believed gamers wanted uDraw on Xbox 360 and PlayStation 3, a decision that greatly hurt THQ.

Luckily for the company, the deadline for when it must bring its share price over the $1.00 mark for 10 consecutive days by to avoid being delisted (July 23) is still months away. It’s going to need that time, too, as the steps it has taken to date have not inspired confidence in investors. Restructuring, exiting the kids/licensed games business, and focusing on core games have only seen the price continue to dip; it sits at a little under $0.49 at the time of this writing, less than a third of what it was in December, which itself was a far cry from where it sat at the start of 2011.

I do believe the move away from developing Dark Millennium Online as an MMO is a wise one. If it really does include the sort of innovation Bilson said it does, it’s unfortunate that it won’t have the opportunity to square off with the likes of WoW in a way where it could have forced (or inspired) other developers to experiment more and adhere less to the typical MMO conventions. But with more and more games becoming free-to-play and the subscription MMO market increasingly having less room for games to experience any significant degree of success, avoiding a battle against WoW, Star Wars: The Old Republic, and potentially Titan is likely to be a wise decision. TOR may be able to survive on the strength of its license; I’m not sure Warhammer, even with its fanbase, is a brand that could yield as many subscribers as Star Wars.

 OP ED: Things Could Be Worse for THQ

The shift for DMO, which was announced on March 29, has not helped to boost the share price in the least, and the one game THQ has coming in the next few months — Darksiders II — may not be coming as soon as expected. Previously announced for a June 26 release, Bilson and his PR handler refused to commit to that release date in speaking with RipTen. When asked about that date, the PR rep said, “Honestly, I can’t confirm that right now.” Bilson shared his expected enthusiasm for the game and said, “We’re going to give that team everything they need to make it as good as it can be,” also adding, “We’re not going to ship it before it’s done.” Since the interview, THQ has declined to offer an update regarding the game’s release, making it look as if it could slip out of June.

If you believe Take-Two’s CEO, THQ may not even be around long enough for it to be delayed that long. Last week Strauss Zelnick talked up his own company and made a remark that stirred up somewhat of a controversy; he stated, “THQ won’t be around in six months.” He was critical of the company’s reliance on licenses and pointed out its quality could not measure up to Take-Two’s, though if you believe Zelnick (who relies on Metacritic averages, which I hardly see as an authoritative indication of such things), that’s true of every publisher in the industry.

As you’d expect, THQ was not pleased with the suggestion, issuing a brief statement which read, “Obviously, Mr. Zelnick’s perception of THQ is outdated and inaccurate. His comments are irresponsible and false. Perhaps he would be better off commenting on his own business.” Zelnick later said he regretted his statements, though it was refreshing to see such an honest assessment made from a prominent figure in public.

I don’t actually believe THQ will be going of business anytime soon. It may have to take some steps it would prefer not to in order to avoid the NASDAQ delisting, but beyond that it does have a fairly strong slate of games between Darksiders II, South Park: The Game, Metro: Last Light, Devil’s Third (from Tomonobu Itagaki), and Insane (from Guillermo del Toro). It’s also got Saints Row, coming off of the biggest game in the series, to tap again for a game a year or two down the line, plus the former developers of Timesplitters trying to see if Homefront can ever be anything. And it still owns the rights to Red Faction, though at this point interest in it seems to be at an all-time low, which I continue to blame on the unfortunate decision to set Armageddon underground. (And whatever happened to the first game’s style of Geo-Mod?)

That is not a terrible lineup to have to work with by any stretch of the imagination. None of it may print money in the way, say, Call of Duty of World of Warcraft do, but there is hope for THQ to claw its way out of the spot it’s currently in.