80° Editoral - A Question of Size

Rob Fahey of GameIndustry writes: It's not terribly long since THQ looked like one of the best growth prospects in the publishing sector. With a new commitment to quality, a determination to build new IP and a strong pool of publishing and management talent, the company's stock was cautiously tipped as a grower - and it's certainly not an assessment I'd have disagreed with.

THQ has been forced to can a pair of racing franchises - Juiced and Stuntman, both of which the firm acquired from other publishers with a view to expanding its market share in racing - alongside a pair of unannounced titles, the PS3 SKU of the upcoming Frontlines title, and the PS2 SKU of the new Destroy All Humans game. In total, the firm expects to suck in around $27 million in charges related to the cancellations - and to close an entire studio, Concrete Games, which was working on an unannounced title.

This happens to every media sector at some point in their history. How many big film distributors are there? Break it down by removing the child companies (such as Columbia Tristar and MGM, both of which belong to Sony Pictures) and you end up with about five or six corporations controlling the lion's share of the market. Music is even more centralised - what was once a thriving market of small publishers has been centralised into four major corporations.

The cost and risk of being involved in the games business took a huge step up when the Xbox 360 and PS3 arrived, and the problems faced by mid-level publishers could be the early symptoms of a major storm that will only be weathered by firms with sufficient scale to survive.

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Cyrus3653675d ago

This will be the year of mergers, and big publishers buying smaller companies up. The next gen development costs too much without having a big publisher backing.

Even a company like Take 2 had to do some deals to keep their company afloat, like get 50 million from msoft for exclusive content. A huge deal with sony for the next exclusive after GTA IV, etc.