At the Citi 2011 Tech Conference in New York City on Thursday morning, THQ's EVP and CFO Paul Pucino showed off video of Saints Row: The Third and a Jimmy Buffett Margaritaville Facebook game, of all things. But when the audience got a chance to ask the EVP questions, things got tough for the EVP. Much of the questioning had to do with THQ's failure and its painful restructuring program this year that saw multiple studios shuttered and its employees relocated or laid off.
When asked about the upcoming closure of two Australian studios, Pucino said, "We changed for a reason, because we think it's the right thing to do."
"With respect to [not] talking about studio closures at our annual meeting this year, then making an announcement two or three weeks later, it was simply because we weren't ready to announce it at that point in time," he added.
Pucino said that the company was moving towards a leaner studio system because "fewer is better" and that going from 11 studios to five is the right number of studios the company needs at this point. Earlier in the year the company announced that it would move away from licensed entertainment games and it would cut costs.
"We think the best position we could be in with respect to studio structure right now, fewer is better," he said. "A year ago we had about 11 [studios], now we're down to five. We think that's the right number."
"The two that we just shut in Australia, they were working on games that were not consistent with our strategy any longer," Pucino continued. "One was working on a movie-based console game -- again, not part of our strategy. The other was working on a kids' licensed game -- not part of our strategy either. That's what drove that decision."
Pucino went on to say that it bought its Australian Studios ten years ago when the Australian dollar was "about half the U.S. dollar" and the exchange rates were more favorable. Running those studios in the present is no longer cost effective, he said.
Naturally THQ's growth in Canada is an important part of its strategy, mainly because the government there is giving the company "significant" tax incentives to operate a Montreal studio. "We're going to be able to make games there for almost a 40 percent discount, or 40 percent less, than some of our other studios," said Pucino.
"It's much more cost effective to have a studio there than [Homefront developer] Kaos Studios, which we closed here in New York City, which was very expensive to run." The industry has changed a lot, our strategy has shifted along with the industry, and unfortunately, that resulted in closing some studios."
Source: Gamasutra
