THQ admits defeat and kills uDraw
THQ has said it has no further plans for uDraw after it revealed that the failed expansion of its tablet peripheral to PS3 and Xbox 360 has cost it $80 million in lost revenue.
Speaking during an investor call after the publication of its dismal third-quarter results, the publisher said it had shipped a million uDraw tablets to retailers, leaving 1.4 million units of manufactured stock left unsold.
"We were confident that uDraw would resonate again this holiday, given last year's robust sell-through," CEO Brian Farrell said, according to Gamasutra. "Our confidence was misplaced."
The publisher says this misplaced confidence cost it $100 million in lost revenue, of which $80 million was directly attributable to uDraw. Of its $54.6 million operating loss, the tablet was responsible for $30 million.
Manufacturing has ceased, software support is a thing of the past, and while Farrell says THQ has a plan to successfully sell the remaining stock he admitted it has "no other remaining committments with respect to uDraw.
"We were looking at uDraw as a bridge to this core and digital future, and that bridge turned out to be a plank that we walked off."
Despite the strong performance of Saints Row: The Third - the publisher shipped 3.6 million units of the game during the quarter – sales revenue fell 2.9 per cent to $305.4 million. Net losses almost quadrupled, to $55.9 million.
Last month THQ confirmed its withdrawal from the licensed kids' game market. Earlier this week the publisher announced 240 layoffs across its publishing and admin teams, and Farrell took a year-long 50 per cent pay cut, in a bid to raise its share price and stave off the threat of a Nasdaq delisting.