Game maker THQ has filed for Chapter 11 bankruptcy and has also said that all of its assets will be acquired by affiliates of private equity firm Clearlake Capital Group, allowing the company to shed legacy obligations so it can be sold to another company.
Clearlake’s acquisition of THQ assets include all four of its own studios, and all the games currently in development. However, THQ has also reassured staff that it will continue operating, with all the studios remaining open and development to continue. With the sale of all four of its studios, it appears that it will mainly be a publisher for other independent game studios.
“The sale and filing are necessary next steps to complete THQ’s transformation and position the
company for the future, as we remain confident in our existing pipeline of games, the strength of
our studios and THQ’s deep bench of talent,” its chairman and CEO, Brian Farrell, said in a statement.
“We are grateful to our outstanding team of employees, partners and suppliers who have worked
with us through this transition. We are pleased to have attracted a strong financial partner for our
business, and we hope to complete the sale swiftly to make the process as seamless as possible.”
Previously worth $2 billion in 2007, the value of the company is now just $11.3 million, according to the LA Times; and its downfall mainly came from the loss of its biggest source of profit – children’s games due to the rise of free-to-play online games. On top of that, the attempt to revive that business with the UDraw was a disaster. In addition, several of its games performed poorly – such as Darksiders II and Red Faction: Armageddon.
THQ has been cutting jobs and closing studios since 2009. The company’s UK studio was shut down in 2011, and several Australian studios like Blue Tongue and THQ Studios Brisbane closed in the same year. It will pull out of the Australian market altogether with the announcement that its Melbourne base would close. In addition, the Japanese office closed at the end of February and its San Diego studios were sold to Midway Games.