THQ reported a loss of $38.4 million today for the first three months of their fiscal year. The publisher blames their poor performance, in part, on low sales for Red Faction: Armageddon.
"We are disappointed in our first quarter financial performance. Sales of Red Faction: Armageddon and our licensed kids titles were below our expectations, and the late release of UFC Personal Trainer also adversely impacted the quarter," said Brian Farrell, THQ President and Chief Executive Officer.
The poor sales of Armageddon are particularly painful because of how much marketing muscle THQ threw behind it. They pulled out all the stops to try and turn the franchise into a household name. To promote Armageddon's launch they released a downloadable vehicle combat game (Red Faction Battlegrounds), a comic book, and a prequel direct-to-TV movie (Red Faction: Origin) over the past year. These efforts didn't translate into strong sales, though.
The low sales may be attributed to the average reviews of the game. Right now all three versions of the game have Metacritic ratings in the mid-70's. Farrell said that those averages are "not good enough."
"We do not intend to carry forward with that franchise in any meaningful way," Farrell said (via Shack News.
Developer Volition has started work on inSANE, a survival horror being created in collaboration with film director Guillermo del Toro. inSANE is expected to be released in 2013. It's supposed to be the start of a trilogy so Volition will be occupied with that for quite some time. You have to wonder how much time they would've had for Red Faction even if Armageddon had been a success.
THQ believes that the second half of the year will be stronger for them. Volition's Saints Row: The Third, due this fall, is one of the games that makes them optimistic.
"Despite a light first half, we are looking forward to a strong and profitable second half, including what we expect to be the biggest third quarter, both in revenue and earnings per share, in our company's history, with proven franchises Saints Row, WWE and the uDraw GameTablet, all launching in November," said Farrell.
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