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THQ's Farrell Aims For Core Market
by Leigh Alexander
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March 11, 2009
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Hoping to return to profitability, THQ CEO Brian Farrell believes the company can gain a foothold in the high-risk -- but high-potential -- core game space.
"With respect to the core gamer, I think it's pretty clear that there is a concentration in the top titles," said Farrell, speaking at Wedbush Morgan Securities' annual conference, in comments listened in on by Gamasutra. "There was an argument over the holiday season -- do you have to be in the top five, top 10."
Many publishers -- including Electronic Arts, to whom THQ has a similar business philosophy -- have observed that polarization in the core audience. "Over a year, if you're solidly in the top four, you can be profitable on these core gamer titles -- but you've got to have one of those top titles for the year," Farrell said.
And the primary trait of a top core title? Quality, says Farrell, again echoing EA CEO John Riccitiello's most frequent refrain. "I'm not sure [Metacritic] is the only thing to look at," said Farrell, "but you've got to have a game that resonates with the consumers and the press."
"We know how to do this," he stated, noting that Saints Row has done 2.6 million units life to date at full price. Farrell says THQ plans to build and launch one to two new brands annually -- "and I think what some people seem to be missing is the breadth and depth of our portfolio," he added.
He noted Red Faction: Guerrilla, the first game in the franchise upcoming for the present console generation after the success of the original on PlayStation 2 and Xbox. And Saints Row 2 is "clearly the number-two open-world game in the category, behind GTA," he said.
Finally: "Warhammer 40k is one brand we should start talking about more. It is a PC-only game -- but from the original Dawn of War game that we built at Relic from the original launch, through expansion through gold edition... we've done about 4 million units life to date on Dawn of War 1."
In February, THQ reported $191.8 million in losses and a 30 percent drop in revenues, prompting a 24 percent staff reduction of around 600 positions. In the last ten months, the company’s share price has fallen from $20 to around $2.
"We've been in this business a long time," said Farrell. "[We've had] 13 years of profitable growth in a row... a return to profitability is top of mind to us. How? With the core gamers, it's matter of focus... fewer but higher-quality core [games]."
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Also too bad they never learned the lesson of actually finishing their games before releasing them. Then again, nearly every major PC title suffers from that mentality...
I think Chris Anderson's book "The Long Tail" described a trend in media that we can't ignore-consumers are seeking niche experiences. Certainly consumers are looking for higher quality content, but they are looking for higher quality content that is relevant to them. Furthermore, core gamers now represent less share in the software and hardware market. In the case of Nintendo, it's tough to ignore their hardware explosion over the past 23 months. I personally own an XBOX 360 (love Xbox live), PSP, and Wii. The Wii has opened up the gaming experience in my household to the rest of the family- kids, wife, mom, and in-laws with an age range of 6-62. The moment my in-laws played the Wii they ran out and bought system and 8 games for their own house. However, the one problem I see with the Wii is the lack of quality content. Our current roster of games (heavy rotation) includes Mario Kart, Mario Party, Raving Rabbids, Wii Sports, and Tiger Woods Golf. We are starving for more content!
Why not diversify and take advantage of an install base that is ripe for 3rd party developers? The "core" gamer market is a tough business to be in these days. It's very noisy and consumers appear to be pulling back spending to focus on their top 1 or 2 titles, saving cash they may have spent on titles further down the list.
I was an artist on COH and COHOF. I would take everyone of the credits I worked on in 13yrs
and trade them for that one COH credit. (THQ published!)
I had the privilege to demo that game at E3 and the feedback was mind blowing.
Absolutely an amazing game- working on a title that your own dev team is addicted to- really says it all.
cheers