In January this year Brian Farrell celebrated 10 years in charge of THQ. His tenure has seen the company transformed from a cast-iron loss maker into one with a mercurial ability to follow the twisting grooves of popular culture.
When he was appointed president and CEO, the company was in a world of trouble; posting massive losses and struggling to come to terms with the post-16-bit meltdown.
Within three years Farrell had doubled its value and asserted the brand as a major player in the PlayStation charts. He has continued to manage growth through each technology change. Within the life of the current generation, THQ’s annual sales have grown from the low $500 millions to the mid $700 millions, with last year’s profits breaking through $60 million.
THQ’s strength is in converting great licenses into hits. Its biggest games of 2004 were The Incredibles, Spongebob Squarepants, WWE Smackdown Vs. Raw, and Finding Nemo, all of which sold between one and four million copies. Its own best performing properties were Tak 2 and Full Spectrum Warrior, neither of which quite hit the million mark in their launch year, and both of which drew largely unspectacular reviews.
In its most recent quarter, THQ’s results were amazing. With mass-market penetration of the current generation, and a saddle-full of juicy licenses, it all came down to delivering decent licensed games in a timely fashion. Nobody is going to accuse THQ of releasing exceptional genre-cracking games, but neither its audience, its retailers, nor its shareholders are complaining. THQ gets the job done without too much in the way of fuss or flannel.
Farrell has shown a level ability to persuade partners like WWE, Pixar, Marvel, and Nickelodeon that THQ is the right way forward. These companies are not merely seeking to monetize their brands through the barely understood medium of games; they understand that games are a major emotional connection between their most valuable characters and their most precious consumers. Trust is everything.
It’s not that THQ can’t turn a decent original game. Much is expected from GSC’s Stalker, and Relic’s Warhammer 40,000 series is well regarded (albeit, itself a license); in racing Moto GP (oops, another one!) leads its market while street speeder Juiced (picked up from Acclaim) has fared reasonably well. Titles like The Outfit represent further attempts to diversify.
With 10 studios to call upon, and with smoother platform transitions predicted plus the emergence of mobile, Farrell’s strategy looks safe, although as consolidation sets into the industry, those golden licenses might become harder to find.
The firm’s interest in mobile, through its subsidiary THQ Wireless, is arguably the most advanced in the industry, with revenues this year predicted at $20 million. Mobile game players are likely to be THQ’s, and Farrell’s, kinds of people.