How A Drawing Tablet Led To THQ’s Collapse

If you were a gamer growing up in the 90s and 2000s, you most likely feel a tinge of nostalgia at seeing the THQ logo. The studio had its original properties, but licensed games were what they were truly known for.

From SpongeBob SquarePants: SuperSponge to Scooby-Doo! Unmasked and The Fairly OddParents: Breakin’ Da Rules, every kid during these decades had at least one tie-in game with the THQ logo loud and proud on the cover, usually received as a gift from a well-meaning family member.

You might’ve even had the uDraw GameTablet, the kiss-of-death peripheral that played a huge part in THQ’s downfall. It’s tempting to ask if the company would still be alive today if not for the tablet’s commercial failure, but to answer that, we need to look back at the history of THQ and what led to its eventual declaration of bankruptcy.

 

THQ Before the Tablet

Founded in April 1990, THQ originally got their start in the toy business (with their acronym standing for Toy Headquarters) before expanding into the video game business in 1991, with several tie-in games for popular kids’ franchises, including Fox’s Peter Pan & The Pirates, Where’s Waldo?, and Home Alone.

Those tie-in games became their bread and butter, and for the rest of the 90s and 2000s, a grand majority of THQ’s published titles were games based on recognizable properties like Rocky and Bullwinkle, Pixar movies, and Nickelodeon shows.

They had original properties, even with some well-known developers. With Rare, they published games like Conker’s Bad Fur Day in Europe, Banjo-Pilot, Sabre Wulf, It’s Mr. Pants, and Viva Piñata: Pocket Paradise. With Pandemic Studios, they published games like Full Spectrum Warrior and Destroy All Humans. With Volition, they published games like The Punisher, Red Faction, Summoner, and Saints Row.

However, licensed games still made up an incredibly large portion of the publisher’s library. While The Simpsons: Road Rage and SpongeBob SquarePants: Battle for Bikini Bottom have their fans, most of THQ’s tie-in games weren’t good and some were downright terrible, but they did prove to be lucrative. Because these games had covers featuring characters kids knew and parents knew their kids knew, they practically sold themselves, with some of them selling over 8 million copies.

THQ even had a branch called “K.F.C.” which stood for Kids, Family, and Casual because of how much they prioritized these demographics. It seemed like THQ could go nowhere but up. That is, from an outsider’s perspective.

See, tie-in games may have been successful at first, but players quickly caught on to how low-quality these games were. They were based on movies and shows that weren’t made with potential game adaptations in mind, and with these games needing to be released around the same time as the film’s release, quick completion was prioritized far more than good gameplay and challenge.

Some games were even linked to films that didn’t do very well, like The Polar Express, Monster House, Barnyard, and Kit Kittredge: An American Girl. The films were, at best, modest successes, and certainly not beloved enough to sell tie-in games based on name recognition alone.

The first iPhone was also released in 2007, and mobile gaming was becoming far more preferable for members of THQ’S K.F.C. crowd. Kids could carry these devices everywhere including family gatherings and road trips, parents didn’t have to worry about spending $20 on games that were as cheap as a dollar or even free, and most importantly, these games were fun.

They were addictive high-score chasers that had seemingly endless numbers of missions or levels. Even Halfbrick Studios, a developer studio that worked with THQ for games like Avatar: The Last Airbender and Nicktoons: Battle for Volcano Island, found great success in mobile gaming with titles like Fruit Ninja and Jetpack Joyride. When it came to casual gaming, THQ’s biggest rivals were now small studios making games for devices small enough to fit on your palm and in your pocket.

In 2008, THQ suffered a $35 million loss, and in 2009, shares were down 86% from the previous year. By the end of the year, 600 employees were laid off and the studio was prompted to cut $220 million in annual costs by 2010 and invest in “fewer, better bets.” One of those bets, it turned out, was a drawing tablet that, much like the company itself, found great initial success only for changing times and an overestimation of possible success to be its eventual downfall.

 

The uDraw GameTablet

Announced in August 2010, the uDraw GameTablet was a peripheral both THQ and Nintendo markedly believed in from the beginning. It was a drawing tablet for the Wii that was bundled with the game uDraw Studio, a program where players could draw and make art using the attached pen, like a kid-friendly version of Inkscape or Adobe Illustrator.

Nintendo worked with THQ for the device to be able to save artwork to an SD card, and in November 2010, the uDraw GameTablet was released to great success. In the month of its release, the tablet had sold over 190,000 units, and THQ CEO Brian Farrell stated that the company was “very, very pleased with the significant launch of this great new franchise.” Within six months, the tablet had sold 1.7 million units.

The uDraw GameTablet could be used for more than just making art, too. It had motion controls that allowed you to control a game by tilting the tablet much like how a Wiimote is used in games like Super Monkey Ball: Banana Blitz and Mercury Meltdown Revolution, and its pen and drawing surface could be utilized for certain unique games.

“In developing the uDraw GameTablet, we wanted to deliver a gameplay experience that would offer families a unique and fun way to play with the Wii,” Martin Good, executive vice president of THQ’s K.F.C., said.

In a little over a year since its release, ten games were released for the uDraw GameTablet, like Pictionary, Dood’s Big Adventure, and SpongeBob SquigglePants. On paper, it made sense that THQ wanted to release versions of this peripheral for the Xbox 360 and PlayStation 3.

When these versions were released in January 2011, though, they were a massive flop with the Xbox 360 and PlayStation 3 audience. Over 1.4 million units were unsold, resulting in a $100 million loss for THQ. Only six uDraw games were released for these two consoles, and within four months, the uDraw GameTablet was no longer being produced.

By February 2012, THQ abandoned uDraw completely to focus on games meant for a more adult audience. “From a contribution margin perspective, we would have doubled the profitability in the quarter were it not for uDraw,” THQ CFO Paul Pucino said in February 2012. “So it was something in excess of $30 million in operating loss in the quarter as a result of uDraw.”

Why did the uDraw GameTablet fail so hard on competing consoles when it did so well on the Wii? Well, the Wii’s main purpose was to introduce non-gamers to the hobby, so a lot of the console’s install base was interested in simple and easy-to-learn games, while the Xbox 360 and PlayStation 3 players were into heavier games like Halo 3, BioShock, and Red Dead Redemption.

The uDraw GameTablet could’ve only done the numbers that it did with a console like the Wii. It was a console that was extremely popular with kids and casual gamers, all of whom were already used to the many, many Wii accessories like the Wii Wheel, Zapper, and Balance Board.

Another thing to consider is that the iPad was introduced in 2010, and its touchscreen made it easier and more fun for kids to draw on and play touch-based and motion-based games with. Anybody who wanted to be serious about art also had the option of buying Wacom tablets, and while they’re harder to learn, they’re also far more rewarding and in-depth.

Not only did the uDraw underperform, but it also resulted in a class-action lawsuit from THQ shareholders for “materially false and misleading statements” about the accessory.

The overconfidence THQ had in the uDraw GameTablet was a costly mistake, but it’s important to note that while it played a huge part in their demise, it was one big bad decision in a sea of other smaller bad decisions.

 

Even More Financial Problems

 

In March 2011, eight months before the uDraw GameTablet’s release, THQ released Homefront, a first-person shooter with an M rating. THQ needed to sell a staggering 2 million copies just to break even, which is crazy considering Homefront was the first entry in an original IP. The game sold over 2.6 million copies, so it did break even, but not by a lot. Reception was also mixed from both critics and audiences, only scoring a 70 with a 6.0 user score on Metacritic.

Add this to the uDraw GameTablet’s release and by the end of 2011, THQ had suffered a loss of over $239 million. They did have one good release in November 2011 with the game Saints Row: The Third, which achieved a score of 84 on Metacritic and sold over 5.5 million copies after a year, something THQ was extremely proud of. “Saints Row was the hit nobody realized was a hit!” THQ president, Jason Rubin, said.

Unfortunately, 2012 was an even worse year for the company. It saw the cancellation of their upcoming Warhammer 40K MMO in March, the stepping down of executive vice president Danny Bilson in May, and the cancellation of Guillermo del Toro’s Insane trilogy in August, one year before the first game’s announced release date. “We put two years of work in,” del Toro said regarding the canceled game. “It was insane.”

THQ then released Darksiders II in August, which only made 2012 an even worse year for the company. If Homefront needed 2 million copies sold just to break even, imagine how much Darksiders II needed to sell. The game had a budget of $50 million, making it one of the most expensive video games ever developed at that time.

In 2014, Nordic Games CEO Lars Wingefors even commented on the surprisingly high budget of the game, saying, “THQ spent $50 million making Darksiders 2. We can produce a product of the same quality but for a lower cost. $50 million is ridiculous. I can’t afford that.”

The sequel was well-received, scoring an 85 with an 8.2 user score on Metacritic, but only sold 1.5 million copies, even less than what Homefront, a new property, made. President Rubin said that while they were satisfied with the game’s quality, “Darksiders II did not perform to our expectations or live up to its generally favorable reception.”

After Darksiders II for the Wii U, the only games the company published were Jeopardy! and Wheel of Fortune. By December 2012, THQ had filed for Chapter 11 bankruptcy, and several of its properties were auctioned to other companies.

One of those companies was Nordic Games, which also acquired the “THQ” trademark in 2014 and changed its name to THQ Nordic in 2016. THQ may have stated that they wanted to veer away from licensed games and focus on high-quality “hardcore” titles, but after two decades of those former games and a misunderstanding of what made their uDraw GameTablet initially popular, the writing was on the wall for the once iconic game studio.

 

Goodbye, THQ

THQ sold many of its games based on brand name recognition, but after a while, that just wasn’t enough anymore. Unlike something like the Boom Blox games which were made because Steven Spielberg wanted a game he could play with his kids, many of the THQ tie-in games came across not as games sincerely trying to give kids fun and entertainment, but as one’s thinking recognizable characters were enough to keep kids wanting more and parents reaching for their wallets over and over again.

It’s no wonder why online and mobile games took over, especially when they were cheaper or even free and were more satisfying to play. “We invested a lot of our time trying to make the fruit splatters feel as appealing as possible,” Luke Muscat, the designer behind Fruit Ninja, said.

It’s hard not to feel a little nostalgic over the death of not just THQ if you’re above the age of 25, but if game companies now should learn anything from the now-defunct company, it’s how important it is to know and respect your audiences and to always keep a finger on the pulse of the gaming sphere. The tides are always changing, technology is always evolving, and what was big once could easily be yesterday’s news by the time you get to play it.

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