THQ's run of losses has finally come to an end after the publisher posted a profit of $15.4 million (£9.9m) for the three months ending June 30. However, the latest casualty of the company's restructuring and narrowed focus is Guillermo del Toro's Insane.
Speaking during an investor call following the release of THQ's results, company president Jason Rubin admitted work had ceased on Insane, a proposed trilogy of horror games helmed by del Toro, director of the likes of Pan's Labyrinth and Hellboy.
"We have decided not to pursue further pre-production on Insane, and have returned all of our IP rights to Guillermo del Toro," Rubin said, VG247 reports. "By cancelling these explorations outside of our core business, we feel we can improve focus on our core game portfolio, which remains unchanged."
This is the second major project the publisher has dropped in as many fiscal quarters. Three months ago THQ confirmed it was dropping Valhalla Game Studios' Devil's Third, and returned the IP to Tomonobu Itagaki after trying, and failing, to find another publisher for the game.
So insistent is THQ on narrowing its focus that it has gone against the industry consensus and withdrawn from mobile and social games. Sales in the channel THQ rather quaintly calls "wireless" were just 1.1 per cent of total revenue, an increase of a mere 0.5 per cent year on year, and development of some un-named Facebook games was cancelled.
Yet this risk aversion appears to be paying off: THQ had spent the previous nine fiscal quarters in the red. It has secured its place on the stock exchange despite Nasdaq threatening it with delisting because of its low share price, and management will feel vindicated by the company's return to profit in a quarter in which revenue fell by 31.5 per cent to $133.7 million (£85.6m).
Much of that, though, can be put down to marketing spend. With no major releases in the quarter THQ spent just $14.6 million on selling and marketing, a decrease year on year of over 70 per cent. That will ramp up in the weeks and months to come, beginning with Darksiders II, which launches in the US next week and in Europe the week after.
Regardless, there's clear reason for optimism at THQ, and in a press release CEO Brian Farrell hailed the restructure an early success and paid tribute to Rubin, the Naughty Dog co-founder whose role as president means he oversees all aspects of product development.
"We have made significant progress reshaping the company," Farrell said. "With the changes implemented over the last several months, we are in a much better position today to deliver on our pipeline of games, beginning with Darksiders II.
"We are also pleased to have new management on board at THQ, led by president Jason Rubin who brings tremendous experience to the company and has a proven track record of bringing multi-million unit sellers to market."
Reason to be cheerful, then, but concerns remain. THQ's inspiration appears to be Activision Blizzard, which has largely shunned the industry-wide rush to mobile and social games and instead maintains a laser focus on proven hits. But THQ has no Call Of Duty in its arsenal, no proven cash cow like WOW or Skylanders on its slate.
The company has just five games planned for release before the end of the current fiscal year next March: the aforementioned Darksiders II, WWE 13, Company Of Heroes 2, Metro: Last Light and South Park: The Stick Of Truth. With the possible exception of WWE and South Park, all will need hefty marketing spend, and will therefore need to sell well if THQ is to remain in the black.