THQ Inc. announced its latest round of cuts as the struggling video game publisher continues to try to right the ship.
The next layoffs may be at a Baltimore-area studio that it bought last year, Big Huge Games. THQ last week told about 120 employees there that they would be let go in 60 days unless the parent company could sell the studio.
THQ also announced it would spin off two of its other studios, Heavy Iron Studios in Los Angeles and Incinerator Studios in Carlsbad, and make them independent companies. THQ still intends to publish games that are in the works at both studios.
THQ announced in February that it would cut 600 employees and reduce expenses by $220 million; the sale or closure of Big Huge Games, and spinning off Heavy Iron and Incinerator are part of that plan.
THQ which not long ago was riding high on record profits and revenue chalked up a $334 million loss in the first nine months of the current fiscal year. The company has also burned through half its cash, and THQ stock has fallen from a high of around $20 in 2008 to about $3 now.
The company’s troubles have sparked speculation that it could be acquired, and one analyst said it might even file for bankruptcy. THQ Chief Executive Brian Farrell is striving to avoid both cases.
THQ did not say how much money it was seeking for Big Huge Games, which was working on an untitled role-playing game that the parent company decided it could no longer afford.
“In another environment we would have loved to take that title to fruition,” said Julie MacMedan, THQ’s vice president of investor relations. “But we had to make some very tough decisions, and it just didn’t meet our criteria.”
The decision to spin off Heavy Iron and Incinerator comes in the context of THQ’s prospects with Disney/Pixar. Both THQ studios did work on games based on Disney/Pixar films, which in the past have been big sellers. But the last couple of titles both of which were made by Heavy Iron have underperformed and many industry watchers expect Disney will not renew its license with THQ.
MacMedan said Heavy Iron would continue to work on “Up,” a video game based on the upcoming Pixar movie, and two new SpongeBob SquarePants games. Incinerator will complete work on a kids game slated for holiday release.
Spot of Trouble
The steady drumbeat of layoffs at Spot Runner Inc. continues.
A tech company that specializes in advertising, Spot Runner announced March 13 that it plans to cut 60 positions. This comes on top of about 150 layoffs last year.
Spot Runner, which is west of the Miracle Mile district, helps small and medium-size businesses craft TV advertisements for as little as $500. The company maintains a library of standard ads that can be customized with logos and music.
Spot Runner, which was founded in 2006, has raised at least $100 million from investors, some with big names like CBS Corp. and advertising giant WPP Group PLC, and had planned an overseas expansion. But the downturn is taking a toll on advertising and forced Spot Runner to instead hunker down.
Many of the recently announced layoffs will be in Spot Runner’s staff handling local search and ad sales for area businesses, said company spokeswoman Rosabel Tao. Until recently, those were areas that Spot Runner seemed to be trying to grow; it recently acquired Weblistic, a Northern California-based company that helps small businesses run online ad campaigns.
“Local merchants simply aren’t advertising to the degree they were before and are pulling back their budgets,” Tao wrote in an e-mail.
Asked whether Spot Runner projected it would have to lay more workers off in the future, Tao responded, “We hope not.”
Carolla Online
Stickam.com, an L.A. company that specializes in streaming videos live over the Internet, announced Wednesday that it had signed a deal to stream comedian Adam Carolla’s podcasts live on its Web site. Carolla was a talk show personality on KLSX-FM (97.1) before the CBS Radio-owned station flipped formats to Top 40 music in mid-February. Since then, Carolla has recorded podcasts of his show at his home. Stickam will stream live video of Carolla and his guests recording the podcasts starting March 25, according to the announcement.
Staff reporter Charles Proctor can be reached at [email protected] or at (323) 549-5225, ext. 230.
