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THQ 'seeking sale' as publisher reveals $21m loss

Company refuses to take questions during financial presentation

Battling publisher THQ has sparked discussions on its long-term chances of survival after a disappointing financial presentation which ended with the company refusing to take questions from investors and the media.

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The group, having survived threats of being delisted from the NASDAQ stock exchange, has revealed a net loss of $21 million for the three month period ending September 30.

Due to a tumultuous reduction on spending, the publisher managed to convey that the $21 million loss was significantly better than the $92 million drop that it announced for the same period last year. But sales are down also, from $146 million to $107 million, as the firm focuses on fewer titles.

Despite the increased pressure on sales performances of its key titles, action RPG Darksiders 2 failed to meet expectations with just 1.4 million units shipped to retail. Some analysts believe the title will not produce a profit.

And in an unusual and uneasy move, THQ's executives decided not to take questions from investors or the media regarding its long-term health.

Adding to further misery, the publisher announced that three titles will be delayed beyond their intended release dates. South Park: The Stick of Truth will be pushed into THQ's next fiscal year, while Company of Heroes 2 and Metro: Last Light have been pencilled in for March 2013.

Investors and analysts were given further reason for concern as THQ declined to offer predictions on its sales and earnings guidance. The company admitted it needs "additional capital", and has appointed a VC firm to help determine its best course for the future.

A merger or acquisition by another company is one outcome on the table - an ideal result when compared to the possibility of bankruptcy. THQ has already drawn $21 million from its line of credit, with cash reserves down to $36 million.

"When I joined THQ the company made a public commitment to quality titles," said the company's president Jason Rubin.

"We always expected that in some cases this would mean that more time would be needed to make sure that every title is of the highest possible quality."

Speaking of the game delays, Rubin said "our fourth quarter releases are the first titles that I have had the ability to materially impact, and experience told me that the games needed additional development time to be market-ready."

He described the commercial potential of South Park as "significant".

"It is shaping up to be one of the most anticipated titles of calendar 2013. It is also an expansive title, encompassing multiple television seasons' worth of content. We have been working closely with the co-creators of South Park, Matt Stone and Trey Parker, to make sure all of the game's content performs to the high standards of the TV show, and this takes time. THQ is committed to giving gamers no less than the rich South Park game they have been waiting for and deserve."

He went on to defend the trio of game delays: "I firmly believe releasing our fourth quarter titles without extra time for polish in the current environment would lead to underperformance that could in turn lead to future additional capital shortfalls. But extending development schedules in order to make the best possible titles also has financial implications. Yet there can be no doubt which path has the greatest chance of leading to the long-term success of the company. We must follow the course that generates the highest quality games, and will establish THQ as a mark of quality for the consumer".

Chief executive Brian Farrell, who appears to have stepped away from being the public face of the company, said that THQ "faces a number of opportunities and challenges".

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