In a conference call concerning THQ's fiscal 2012 First Quarter results, sales of Red Faction: Armageddon, licensed kids titles (Penguins of Madagascar, Barbie Jet, Set and Style), and UFC Personal Trainer have "adversely impacted the quarter," according to CEO Brian Farrell.
As a result of the bad performance and an increase of net losses, from $30.1 million in fiscal Q1 2011 to $38.4 million this past quarter, Farrell noted that "given that that title, now in two successive versions, has [only] found a niche, we do not intend to carry forward with that franchise in any meaningful way."
Farrell went on to say that the game "did not resonate with a sufficiently broad console gaming audience" and that "in today's hit-driven, core gaming business, even highly-polished titles with a reasonable following like Red Faction face a bar that continues to move higher and higher."
It looks like the move to turn the well-received Red Faction: Guerilla, with its open world gameplay, into a more linear shooter affair with Red Faction: Armageddon to release alongside Duke Nukem Forever has not paid off. I don't think anyone did not see that coming.
It's a shame to see the destruction-fest of Red Faction disappear from the gaming landscape, and perhaps Volition will be able to license it's Geo-Mod engine to other developers so we'll see it return in other games.
Worth pointing out is that the additional $8.3 million net loss compared to the same quarter last year comes alongside an increase of net sales revenue from $149.4 million to $195.2 million. These are GAAP numbers, or a standardized set of accounting principles that make financial reports by companies more comparable.
On a non-GAAP basis, which in this case includes impact of deferred revenue, business realighment expenses, stock-based compensation and related costs, and capitalization of interest, THQ actually reports that quarterly net sales went down to $141.2 million from $160.3 million and net losses increased to $64.4 million compared to $14.4 million in the same quarter last year. The vast majority of the difference between the GAAP and non-GAAP reported numbers is due to deferred revenue (costs in this case) -- money THQ is set to receive or lose on titles for which the online service is "determined to be a deliverable over the estimated online service periond" -- so take that as you will.
While THQ has been evangelizing a transmedia strategy for it's franchises, it also makes one wonder if making that Red Faction: Origins SyFy movie -- which wasn't terrible by SyFy standards but still pretty bad -- was a worthwhile investment. Especially since the franchise is now dead for all intents and purposes with nothing to gain from an increase in consumer awareness.
Since Ubisoft and EA have had success with it a more cross-platform approach to franchise integration through the Assassin's Creed's Project Legacy and Dragon Age Legends Facebook games, and Insomniac's upcoming Global Resistance looking like another solid example of promoting a new title, perhaps using a movie to promote a game was not the best idea.
The same can be said for iOS games as EA's Q1 2012 fiscal report recently revealed that on a non-GAAP basis, the publisher's quarterly revenue for its mobile division makes up for 11% of the total -- more than half the PS3's 21%. Between EA's mobile offerings for its franchises (Dead Space, EA Sports) and other publishers' adoptation of mobile platforms to strengthen their brands across multiple platforms, which does not necessarily cut into console or PC sales but might actually increase them, perhaps THQ would be wise to adopt a more cross-media approach in addition to its transmedia strategy.
As for Volition, the studio is still busy with its Saints Row games, as well as the Insane game-that-might-be-a-trilogy they are making in collaboration with Guillermo Del Toro. Perhaps now they can work on a new downloadable episodic Descent or Freespace title with the team that was focusing on Red Faction? The numbers don't seem to be in favor of such a thing, but one can hope.
Fun fact: "gaap" means "yawn" in Dutch.
THQ Phases Out Red Faction Franchise Following 'Disappointing' Sales [Gamasutra]
Contest:
8:20 AM on 07.28.2011 | 
I'm starting to think Volition is working on their Saints Row series more.
As for red faction IMO the franchise took a hit with guerilla and went even further down thanks to Armageddon. I won't be surprised to see red faction return, but back in it's FPS Form. RF1 and 2 were the best ones. RF2 did have a weak campaign but honestly had a very very strong MP component. One of my favorites from last gen.
It's just a Shame the series has to take a break on such a Meh game like armaggedeon.
At least it didn't suffer the same fate as Dino crisis. End on a absolutely terrible game and then never mention it again. Then forget the series ever existed
Armageddon was actually a good game, but people ignored it because it wasn't a sandbox game.
This is an awful, if not honest, statement that says a lot about what happened to gaming this generation. It is one thing to use crummy business models to kill niches off, and its another to imply the concept of a niche altogether is unacceptable in the gaming industry.
So, what he is saying is that they took the "niche" success of Armageddon (I use it loosely, as a third person shooter the likes of Armageddon is niche), and wanted to build a mainstream game out of it. Then, when this blatant and ridiculous mainstreaming fails, suddenly the whole thing was niche and therefor no longer worth pursuing. This is such a massive logic fail that I'm pretty sure I can hear brain cells dying.
Publishers are hamstringing themselves, and the more they put all their eggs into the mainstream market, the more "niche" formerly mainstream games become. The industry cant afford to diversify its product, and the more money they are forced to pour into broad appeal type games, the larger the bubble grows.
2.Remove everything that made it fun.
3.Add things that make it even less fun.
4. No profit.
They seemed to have big plans for that franchise after the success of the first game on the Wii. With the sequel, they went multiplatform and had an animated series planned with SyFy Kids. Seemed like they had high hopes for the series.
But when De Blob 2 finally released, they had shipped limited quantities, they had no marketing surrounding it and the animated series was never heard from after the initial announcement. Since Febuary, I haven't heard THQ say a single word about anything De Blob related. It's like the games never even existed. Even now, in their first quarter finical report; nothing.
At least they respected the Red Faction franchise enough to tell fans that it was dead.
I actually saw a bunch of commercials and billboards in Chicago regarding De Blob 2. They went the same approach as last year with their marketing, and that sold well. Maybe they're trying to repeat success?
If so: .____.
It's a shame, but oh well. Just another reason why PC gaming is looking better to me. It seems that if you want to play things that aren't mainstream you either have to go to PC where PC mainstream isn't really the same, or jump to handhelds and downloadable titles.
also,
IT REALLY WAS RED FACTION ARMAGEDDON
I bought it for $20 and played it enough to make it worth $20 so I would say it is worth $10 but I don't think it will suck you in enough to want to beat it.
Unlike Michael Jackson, I never beat it.
In other news, THQ will continue to pump out Spongebob games forever. You're welcome.
Guerrilla was a sleeper hit. It didn't sell crazy amounts, but it was general received as a decent game by most people and often recommended by people when the price went down.
I wasn't a huge fan of Guerrilla until I got the jetpack. The jetpack turned the game around in a lot of ways and took me from being bored to pretty darned impressed.