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Yesterday’s closed-doors auction for THQ’s assets and properties dragged on far longer than anticipated, pushing back the sale hearing that was originally scheduled for 9am (Eastern US) today. However, a leaked employee email from THQ reveals and resolves many of the lingering questions about the fate of various studios and games tied up in the bankruptcy proceedings.

First, and saddest, the sweetheart deal arranged between THQ and Clearlake Capital (that would have seen THQ’s properties remain together under one owner) did not survive the auction process. Instead, studios, game rights and publishing rights were sold off piecemeal to the highest bidders.

The THQ letter is repeated in full at the bottom of the page, but here is the part likely to be of most relevance to games fans with a few of my own additions for clarification. Sale prices are as reported by Distressed Debt Investing:

  • Sega agreed to purchase Relic (developers of Company of Heroes) for $26 million USD
  • Koch Media (who publish under the Deep Silver brand) agreed to purchase Volition (Saints Row) and Metro (by 4A Games, presumably publishing rights) for $22.3 million USD and $5.8 million USD respectively
  • Crytek (Crysis) agreed to purchase Homefront
    for $0.5 million USD
  • Take 2 agreed purchase Evolve (an unannounced project being worked on by Turtle Rock) for $11 million USD
  • Ubisoft agreed to purchase THQ’s Montreal studio and South Park (publishing rights) for $2.5 million USD and $3.2 million USD respectively

Those sales agreements and prices are confirmed by the official bankruptcy court documents.

Conspicuously absent from that list is Vigil and Darksiders. Other existing THQ properties such as Homeworld are also not mentioned by name. A further paragraph in the letter explains:

Some assets, including our publishing businesses and Vigil, along with some other intellectual properties are not included in the sale agreements. They will remain part of the Chapter 11 case. We will make every effort to find appropriate buyers, if possible.

An additional point of interest about Ubisoft’s acquisition of THQ Montreal is that it reunites original Assassin’s Creed creative director Patrice D├ęsilets with his former employers. At THQ Montreal, D├ęsilets was working on an unannounced project dubbed 1666.

It’s a sad end for THQ and the beginning of an uncertain period for all of its employees.

The full THQ letter follows:

To All THQ Employees:

We now have the answers we’ve been seeking through our financial restructuring and Chapter 11 case. While much will be written, here are the facts of the bids and auction that occurred:

Yesterday morning, we received a competing bid for the operating business, along with Clearlake’s offer, and numerous offers for separate assets. During an auction process that lasted over 22 hours, the final conclusion was that the separate-asset bids would net more than a single buyer for the majority of the company.

Shortly, we will, present the results to the U.S. Bankruptcy Court, which must concur with our assessment.

The proposed sales of multiple assets is as follows:

Sega agreed to purchase Relic
Koch Media agreed to purchase Volition and Metro
Crytek agreed to purchase Homefront
Take 2 agreed purchase Evolve and
Ubisoft agreed to purchase Montreal and South Park
We expect these sales to close this week.

Some assets, including our publishing businesses and Vigil, along with some other intellectual properties are not included in the sale agreements. They will remain part of the Chapter 11 case. We will make every effort to find appropriate buyers, if possible.

What this means for employees

We expect that most employees of the entities included in the sale will be offered employment by the new owners. However, we cannot say what these owners may intend, and there will likely be some positions that will not be needed under the new ownership. You should receive notice this week or early next week if the new owners intend to extend employment to you. Please note that the terms of your new employment, including pay and benefits, may be different from the current terms of your employment with THQ.

If you are an employee of an entity that is not included in the sale, we regret that your position will end. A small number of our headquarters staff will continue to be employed by THQ beyond January 25 to assist with the transition. THQ has sufficient resources to pay these employees for work going forward, and we will be contacting these employees immediately to ensure their continued employment during this transition period. We are requesting the ability to offer certain severance pay to minimize disruption for employees of non-included entities as they determine the next steps in their careers.

We know you will have many questions about this news. We’ll be meeting tomorrow when we return to talk through this announcement and to answer any questions you have. You will receive a benefits fact sheet and FAQs with answers to some questions that may be on your mind. Please review these materials closely.

A personal note

The work that you all have done as part of the THQ family is imaginative, creative, artistic and highly valued by our loyal gamers. We are proud of what we have accomplished despite today’s outcome.

It has been our privilege to work alongside the entire THQ team. While the company will cease to exist, we are heartened that the majority of our studios and games will continue under new ownership. We were hoping that the entire company would remain intact, but we expect to hear good news from each of the separate entities that will be operating as part of new organizations.

For those THQ employees who are part of entities that are not included in the sale, we are confident that the talent you have displayed as part of THQ will be recognized as you take the next steps in your career.

Thank you all for your dedication and for sharing your talent with the THQ team. We wish you the best of luck and hope you will keep in touch.


Brian Farrell
Chief Executive Officer

Jason Rubin

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