THQ files for bankruptcy protection
It is the festive season and in most cases this time of the year is to be full of happiness, joy and loads on laughter. Yesterday news broke that THQ, a gaming development company has filled for bankruptcy protection. It dampens anyone’s joy when you hear or read these kinds of stories.
The legalese is difficult to explain but in layman’s terms the company is seeking protection from creditors while a transaction to secure the future of the company is being processed. Chapter 11 is a safety net for U.S. companies. Household names such as Macy’s, Chrysler, Delta Airlines, General Motors, Marvel Studios, and MGM have all filed for Chapter 11 bankruptcy protection.
THQ has announced that it has secured an investor, a private equity firm named Clearlake Capital Group, who is interested in purchasing most of what you think makes up THQ: the teams that make the games, HQ’s Intellectual Property, THQ’s contracts and the support staff that are required to help the teams succeed. That is pretty much the entire THQ business.
The truth is that all gaming development businesses are battling and as surprising as this may be, it is not unexpected. I get the feeling that THQ is going to turn this current situation around and end up being a better company. Simply look at how General Motors turned it around, which shows it is possible. The mere fact that a private equity firm is interested in putting capital into the THQ business shows me that this has been planned and has not happened overnight.
I hope that THQ continues making great console games as they have provided many hours of entertainment to gamers all across the world. Will more business like THQ face this in 2013?