International video game publisher THQ has closed two local development studios as it seeks to narrow its focus to original IP, highlighting how tough the industry has become for start-ups.
THQ, based in the United States, develops products for video game consoles, handheld game systems, personal computers and wireless devices. It has offices in North America, Europe and the Asia Pacific.
The company has confirmed the closure of Melbourne-based Blue Tongue Entertainment and Brisbane-based THQ Studio Australia.
Blue Tongue was formed in 2005 and published AFL Finals Fever the following year. It was acquired by THQ in 2004 and has worked on various series including Marvel Super Hero Squad.
The Brisbane studio was formed in 2003 and had a history of developing games around Nickelodeon franchises, namely the Avatar: The Last Airbender series.
THQ said in a statement it is narrowing its focus to “high-quality owned IP with broad appeal that can be leveraged across multiple platforms, and to work with the best talent in the industry”.
“By right-sizing our internal development capacities for our console portfolio, our five internal studios are focused on delivering high-quality games with talented teams driving the execution of those titles to market,” THQ chief executive Brian Farrell said.
Farrell said THQ is making shifts to reduce movie-based and licensed kids’ video games in its portfolio, which “underscores our strategy to move away from games that will not generate strong profits in the future”.
“We will continue to evaluate our capital and resources to concentrate on fast-growing digital business initiatives such as social games, mobile and tablet-based digital entertainment,” he said.
About 200 employees have been affected by the decision, but THQ said they will be eligible to apply for other positions within the company.
While the international video game industry is set for massive growth over the next few years, the Australian industry is suffering.
Part of the problem is that many Australian studios rely on work from international publishers instead of original IP.
Many of those publishers, located in the US and Europe, have only just started to hand out more projects. The Australian dollar has also made them hesitant.
While developers praised the introduction of R&D legislation earlier this year, designed to help bring international development dollars into the country, it has come too late for some.
Recent figures from a survey conducted by the Interactive Skills Integration Scheme found the number of developers within Australia has decreased significantly over the past few years.
In a bid to prop up the sector, the Game Developers’ Association of Australia has announced that Game Connect: Asia Pacific will return to Melbourne this year.
GCAP is Australia’s premier annual game development conference, exhibition and networking event for the Asia Pacific games industry.
It will deliver lectures, master classes and discussions in order to identify the processes, resources and opportunities that will grow the Australian industry over the next few years.