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THQ Gets Hit With Class-Action Lawsuit; Casual Gaming Fails
THQ wanted to broaden their horizons. Last year they had the bright idea to try to cash in on the casual craze. "All those casuals buying crap", thought THQ, "We can get them to buy our crap, too." Wrong! No one bought THQ's casual crap and now investors are about to sue the pants off THQ.
The news comes courtesy of Side Mission, where Dan Seitz recounts a new class action lawsuit being compiled against THQ because...
The suit accuses THQ of violating the Securities Exchange Act of 1934, for, essentially, refusing to believe the UDraw was going to bomb as badly as it did and thus not telling its investors that the UDraw was going to bomb.
Essentially, THQ is being hit with a lawsuit over a product they didn't warn investors about as a potential financial bomb. No, not a "potential" bomb, a "definitive" bomb. Somehow, THQ was supposed to know that UDraw was going to fail and fail hard, that casual gaming would not be a lucrative venture and that anyone investing in THQ's stock between May 3rd, 2011 and February 3rd, 2012 were screwed over by the company.
In this case, I'm on THQ's side.
I don't agree that they should have even bothered with UDraw and it was a waste of $50 million, and the cause of their downfall from top-tier status, but they tried to bring a product (a bad product) to the market and it failed. I don't really see how they were supposed to know it was going to fail when so many other crappy casual games like Carnival Games, Wii Fitness, Zumba Fitness and [Insert celebrity name here] Fitness have all been big sellers for motion-controlled gaming. Why wouldn't a crappy drawing tablet game be a big seller? They were probably using the same logic Zynga did when they acquired OMGPOP for Draw Something, which is now bleeding its user base faster than a teeny-bopper losing fans after hitting adulthood.
Former Naughty Dog head and THQ's new president, Jason Ruben, has lamented the piss-poor press the company has been receiving lately, as reported by NeoSeeker, saying...
"There seems to be this disconnect. Metro gets best game shown nominations, but 'THQ may not make it'. Company of Heroes - nominations, but 'THQ isn't going to make it'. People are so used to the downward slope that they don't see that it can flatten out. So I'm here to make it flatten out and then turn the corner."
Well, hopefully they can flatten out and then "turn the corner" before the lawsuits drag them down under. THQ still has some life left in them and I'm definitely curious to see how they drag themselves out of this mess.
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