Darksiders II has sold an estimated 1 million copies, but analyst Michael Pachter says the game is struggling to cross the 2 million milestone it will need to reach for THQ to break even on the title.
"Darksiders II's performance and a history of game delays and cancelations leaves us skeptical that THQ can successfully execute its turnaround strategy, which centers on a streamlined release slate," says Wedbush Securities' Pachter.
He points to the publisher's recent abandonment of two high-profile projects, InSane (from film director Guillermo del Toro) and Devil's Third (from Valhalla Game Studios, a new team headed by former Ninja Gaiden director Tomonobu Itagaki), as a potential problem for THQ, as it looks to boost its revenues with new releases.
Pachter predicts that THQ will beat analyst estimates of around $75-85 million in revenues when the publisher reports its second quarter earnings (on November 5), even though its software sales during the July-September months were down year-over-year by 18 percent, according to NPD. He advised caution to investors for the rest of the fiscal year, though, warning "management has a history of missteps."
Developed by THQ's Virgil Games studio, Darksiders II was the top-selling title of the month at U.S. retail when it shipped in August for PlayStation 3, Xbox 360, and Windows (a Wii U version will also release when that console launches in November). The original Darksiders, which debuted in January 2010, has also sold over 1 million copies.
I realize I'm just one customer, but there is a lesson here.
I bought Darksiders late on PC and discovered it was great and I loved it. I then followed the development and release of Darksiders 2, checked Steam and discovered they want £45 for it at release, screw that I'll wait.
Few weeks later the price dropped to £39.99 with a supposed "discount", read some reviews and discovered the PC version was lacking some basic functionality...so again, no thanks.
Was on a Steam sale the other week for about £12.99 so I bought it, haven't played yet but I wanted it. Now the question is, if it had been a more reasonable price at launch, would I have bought it full price? I think I would have I think I would have spent up to £29.99 at launch and not even bothered waiting for a review.
So while I did give them some money, they could have easily had double that if they hadn't set it so high to begin with.
Maybe they had enough impulse buyers at the beginning to justify their strategy. Or maybe they didn't. Maybe they only dropped the price because they weren't selling well enough to command the premium. So if they had done better, maybe you'd still be waiting for a sale that never comes. Any games you can think of like that?
The problem here is one that has plagued "Next Gen" development since the beginning. "We need to sell two million copies or we can't break even on the project".
I guess the next well worn step in this tale will be to lay off the employees if those 2 million sales do not materialize.
Maybe they should have stayed in the so much hated "kids" license business, maybe they shouldn't have abandoned the Nintendo platforms, maybe focusing on the "hardcore" market is a stupid idea.
This. Never abandon a profitable niche. It is a strategic beachhead that allows a company to invest and advance into new market segments. Though to be fair, I think there were some licensing agreements that were not renewed that may have weakened THQ's position in that niche. Focusing on core games was probably an intentional strategic shift in anticipation of the loss of certain licensed properties or to minimize their dependence on them. They could have probably managed the risk associated with the strategic shift a little better though.
People's reactions perplex me. Since they are developing a version for Wii U that wasn't released yet they must obviously have factored that into their expectations...therefore it is premature to be evaluating their success/failure at all at this point. We shouldn't be talking about this so seriously until the Wii U version has had its' chance.
I bought Darksiders late on PC and discovered it was great and I loved it. I then followed the development and release of Darksiders 2, checked Steam and discovered they want £45 for it at release, screw that I'll wait.
Few weeks later the price dropped to £39.99 with a supposed "discount", read some reviews and discovered the PC version was lacking some basic functionality...so again, no thanks.
Was on a Steam sale the other week for about £12.99 so I bought it, haven't played yet but I wanted it. Now the question is, if it had been a more reasonable price at launch, would I have bought it full price? I think I would have I think I would have spent up to £29.99 at launch and not even bothered waiting for a review.
So while I did give them some money, they could have easily had double that if they hadn't set it so high to begin with.
I guess the next well worn step in this tale will be to lay off the employees if those 2 million sales do not materialize.