Yesterday during THQ's conference call to discuss its third quarter results, the company acknowledged that it has had some trouble developing Warhammer 40,000: Dark Millennium Online, and is now looking for an outside developer to handle future development on the title. In January rumors surfaced that THQ had canned the project altogether. With this revelation it at least proves that the Warhammer 40,000 MMO project is in serious trouble and that development has probably come to a stand-still.

Yesterday during THQ's conference call to discuss earning with investors and the media, the company admitted that they were wrong about a number of things.

"On our last call we told you we anticipated that our third quarter would be the largest in our company's history, " said President and CEO Brian Farrell at the start of the call. "Unfortunately, we were wrong."

If you are wondering just how bad uDraw's sales hurt the company, then you need look no further than EA's results released today. During a conference call today to discuss its latest results, CFO Paul Pucino revealed that sales of the PlayStation 3 and Xbox 360 versions of THQ's uDraw tablet were $100 million below the publisher's expectations. He also said that 1.4 million units of the peripheral are sitting in warehouses collecting dust.

IGDA Mobile SIG Chair Kevin Dent predicted that THQ would lay off around 170 employees yesterday. It turns out that he was under reporting the carnage at the company. Today it was revealed that THQ plans to let a total of 240 employees go in the next few months. The majority of the staff cuts will be made by the end of the financial year on March 31, 2012, with the rest happening by October.

More than 170 employees have been cut from various THQ studios, including high profile game industry veteran Mark DeLoura (who served as vice president of technology at the company), according to Kevin Dent, chair of the IGDA Mobile SIG. Dent, who is also the CEO of Tiswaz Entertainment and an advisory board member at PlayHaven, said earlier this month that THQ had canceled its entire 2012 line-up. The company vehemently denied that rumor. Yesterday it was revealed that NASDAQ had threatened THQ with being delisted from the U.S.

The NASDAQ stock exchange has warned publisher THQ that it is in danger of being delisted. NASDAQ warned the publisher because it has failed to meet certain requirements of the exchange such as keeping its stock trading at or above $1 for 30 consecutive days. The $1 trade price is a minimum requirement of the exchange, along with having a certain amount of capital on hand.

For the third time in the past year, THQ has announced once again that it is moving away from licensed titles targeted at children and is  focusing instead on core games.

“THQ will be a more streamlined organization focused only on our strongest franchises,” said Brian Farrell, President and CEO of THQ.

They also pointed out that Saints Row: The Third is doing very well, having shipped 3.8 million units globally, with expectations of 5-6 million shipped during the life cycle of the title.

The Quebec Court of Appeal for the District of Montreal has ruled in favor of THQ Montreal and its parent company. The decision strikes down a provisional injunction obtained by Ubisoft that temporarily prohibited THQ from soliciting Ubisoft employees who were bound by a non-compete provision with Ubisoft. The lawsuit was filed by Ubisoft after THQ announced that developer Patrice Désilets had joined the studio to create a new intellectual property after he resigned as Creative Director of Ubisoft’s Assassin’s Creed franchise.

Last week THQ confirmed that it had lowered its third-quarter projections, mostly based on poor sales of the HD versions of its uDraw tablet for Xbox 360 and PS3. On Friday the company delivered some retribution to 30 of its employees who worked on that project in some way. The company laid off 30 employees from its Play THQ development team, including unit leader Martin Good. That team worked out of THQ’s Agoura Hills, California offices.

THQ expected that bringing its popular Wii drawing peripheral, uDraw, to other platforms would be lucrative. Earlier this year they announced that the uDraw would be coming to the Xbox 360 and PS3. With the peripheral out and in stores, it looks like THQ isn't getting the kind of returns they expected. The company said yesterday that sales for the third quarter would be down around 25 percent and blames weak sales of the drawing peripheral for the Xbox 360 and the PlayStation 3.

Another day, another broken promise from a publisher about extra content included in a game for free. You may recall that earlier this month EA failed to deliver free content - Battlefield 1943 - that it promised to PS3 owners who purchased Battlefield 3 during E3 this year. THQ apparently has done the same thing to PS3 owners. THQ announced earlier this year that "an exclusive mode" would be available on the PS3 version of Saints Row: The Third that utilized the Penetrator (a three-foot long purple sex toy attached to a bat handle).

THQ CEO Brian Farrell said at the Cloud Gaming USA conference in San Jose today that cloud gaming is the future and that - to paraphrase what he actually said - will inevitably cannibalize traditional retail, with console makers dropping the need for discs on the next generation of consoles.

"No physical goods cost for game makers,” said Farrell. “No inventory, no markdowns, and all the money spent by the consumer would go to the developer or publisher."

THQ has decided to put the Red Faction franchise on ice, after reporting disappointing first quarter revenues that amounted to a $38 million loss. The last two games in the franchise have not met sales expectations, according to THQ, and the company says that it is having a hard time justifying further investment in the franchise at this point in time.

According to a Gamasutra report, THQ is in the process of closing Digital Warrington and Kaos Studios, two of its wholly-owned development studios. The Kaos Studios closure had been hinted at by THQ earlier this year, as the company eyed moving its developmental operations to the Montreal area where it already has a presence.

"THQ continues its strategy of aligning the best industry talent with the company’s marquee franchises," the company said in a statement sent to Gamasutra.

In March THQ laid off 17 employees, leaving the studio about 70 developers strong. Today those 70 employees are out of work, though THQ said that it is hiring for Montreal and all employees that have been let go may apply for jobs there. That is little comfort for those that can't afford to relocate to Canada.

Gamasutra reports that THQ's New York City development outfit, Kaos Studios, has cut staff. THQ has also reportedly cut some staff from Red Faction and Saint's Row developers Volition. Kaos Studio most recently completed development on Homefront. Around 16 jobs have been eliminated from Volition, while 17 positions have been cut from Kaos.

In a statement to Gamasutra, representatives for THQ explained that "the changes are not expected to affect any current or future titles in development with Volition." THQ went on to say that Kaos has a "dedicated team in place" to continue supporting Homefront with post-launch content while preparing for future projects.

The cuts at Kaos Studios are not unexpected, as THQ had talked about thinning the herd long before Homefront was ever complete. Many believe that THQ will move that studio to Canada at some point.

THQ has been very naughty, says Ubisoft, who managed to get a court injunction preventing the company from stealing any more of its employees, according to a Eurogamer report. A Quebec court has sided with Ubisoft. The court action relates to THQ recruiting Assassin's Creed creative director Patrice Désilets to lead its new Canadian studio.

Désilets then encouraged Assassin's Creed artistic director Alex Drouin, production manager Mark Besner and associate producer Jean-Francois Boivin to join him over at THQ. The problem with that was that Désilets had a one-year non-compete clause in his Ubisoft contract.

This allowed Ubisoft to get an injunction against THQ and Désilets in January of this year.

An update to fix a bug that causes the Xbox 360 version of THQ's Homefront to freeze is a day or two away from Microsoft certification, according to a Eurogamer report. The title update to the game addresses the Profile Corruption error, or "freeze bug" that some Xbox 360 users have experienced while playing Homefront. THQ says that this issue is its highest priority.

"We are also including a fix for multiplayer connectivity and ping time issues, where players are being sent to distant server locations at the expense of performance. We expect this update to be submitted to Microsoft really soon and we will be working with them very closely to get this approved and deployed as quickly as possible," said THQ on its Homefront blog.

While it might not be as frequent as it once was, it’s still not uncommon to hear publishers bemoan the existence of the used game market and express a desire to see it go the way of the dodo.

But not THQ.  No, the publisher of the recently released Homefront doesn’t want to kill off the used game market, it just wants to make sure it’s making some money off it.  THQ CEO Brian Farrell explained it to MCV thusly:

“The most important thing is we have to participate in the value chain in used games.  We understand, given our focus on the gamer, that consumers like to be able to monetise their game library. So it is an ecosystem between publisher, gamer and retailer that just has to sort itself out.  Part of it is monetising but the bigger win is keeping our gamers engaged with DLC and robust online play, and that keeps the disc in the first purchaser’s hands.”

THQ is no doubt happy to report today that Homefront first day sales in North America were approximately 375,000 units. The game ships to Europe and Asia Pacific throughout this week. No doubt THQ is delighted to make this announcement after an average Metacritic score of 73 (73 on PS3, 71 on Xbox 360, and 72 on PC) saw investors get nervous and sell off yesterday.

"We are delighted with first day sales for Homefront and are already fulfilling re-orders for the game from multiple retailers," said Brian Farrell, THQ President and CEO.

It looks like the team developing future Homefront titles will be in Montreal, and not Manhattan exclusively. According to a report on Joystiq, THQ Montreal/Kaos Studios collaborated on the first game. Senior VP of Core Studios Dave Davis mentioned the Montreal/Kaos Studios collaboration during a studio head roundtable this afternoon at GDC.

"Wherever the talent is, we will have our studios," Davis told , though he admitted that "Manhattan is an incredibly expensive place. There isn't a talent pool -- most of the people we have there are imported to NYC."

Davis said that, while it is expensive to develop games in Manhattan, he doesn't see the Kaos Studio offices closing anytime soon. But at the same time, he admits that there could be some consolidation of the two studios:

C|Net reports that the citizens of San Francisco are apparently ticked off at THQ - and by extension its partner GameStop - for releasing hundreds of balloons into the sky as part of a mock protest of North Korea - part of a marketing ploy for its new game Homefront. The balloon release happened during the Game Developers Conference. Many of the balloons had a postcard-size flyer attached to it advertising the game. People in the downtown area saw the balloons soaring in the sky, but were disgusted as they watched them land in the San Francisco Bay. That is when some residents began to express their anger. The anger was aimed at GameStop, which was a promotional partner with THQ and whose name appeared on the balloons.

According to multiple reports, THQ Studio Australia has cut around 14 from its art department. Develop reports that these workers are not being given the option to find positions elsewhere in the either. With this round of layoffs, the studio's headcount is right around 60 employees. This may be the result of THQ saying earlier this year that it was going to be less reliant of licensed children's properties, which the studio had focused a lot of energy on in the past.

"We have let 14 employees go at our THQ Australia studio. In the normal course of business, we expect to adjust our workforce both up and down as required by project needs," read a company statement.

We wish all those affected good luck in finding new positions elsewhere in the region.

Source: Develop

Publisher THQ has sold its mobile division, according to published reports this morning. THQ Wireless, the division launched in 2001 to tackle the lucrative mobile games market, has been sold off to advertising and distribution firm 24MAS. Stockholm-based 24MAS is an advertising and 'premium applications' company serving customers in over 80 countries via a proprietary software platform.

THQ says that the sale of the division does not mean an exit from the mobile market: "This agreement and our ongoing relationship with 24MAS will enable us to continue focusing on cutting edge games for Apple and emerging smartphone platforms while enjoying the distribution services of 24MAS on wireless carrier platforms," said Ian Curran, THQ's executive vice president of Global Publishing.

As part of its financial results yesterday, THQ quietly revealed why it really shut down its Company of Heroes Online beta: because it was cancelled. The company announced that it had cancelled Relic's online adaption of the popular RTS-action series set in World War II, and its online wrestling game, WWE Online.

The company also said that it has reevaluated its licensing strategies when it comes to children's movies. From the financial report:

THQ recorded a major loss and saw its revenues fall in the third-quarter as consumers spent less on its video games during the holiday shopping season. The company posted a net loss of $14.9 million, compared with a profit of $542,000 in the same period a year ago. THQ's revenue fell 11 percent to $314.6 million from $356.9 million a year earlier.

Still, the company tried to put a brave face on the discouraging revenue numbers.

"We posted a strong holiday quarter led by our new uDraw GameTablet, which shipped 1.2 million units. This owned intellectual property provides THQ with a new growth opportunity focused on innovative and creative game play," said THQ President and CEO Brian Farrell. "Our fiscal fourth quarter continues our robust release schedule of high quality, high profile games including Homefront, WWE All Stars, and de Blob 2."

Relic Entertainment announced via the Company of Heroes web site that it is shutting down Company of Heroes Online. The game never made it out of the beta testing phase. The World War II-themed real-time strategy / action game hybrid will officially close on March 31.

Relic also announced that it is no longer selling COHO Cash (the game's currency), and are urging players to spend cash they have now. Refunds for cash are not likely. While Relic describes the six month-long beta test as "successful" the future of the online game is in doubt:

"We are still working on our plans for the Company of Heroes franchise and are not ready to discuss details yet. We will be leveraging all the data and feedback the Company of Heroes Online Beta generated."

THQ's future leaning action game Homefront will utilize "online Pass" for online play via a code packed in the game. Much like it did with UFC Undisputed 2010, used game buyers will have to purchase a new code online in order to play the multiplayer part of the game in its entirety.

THQ did say that it will offer a limited multiplayer option for used game buyers that gives them access to multiplayer up to level 5. The game features a full 75 levels.

The extra code will cost right around $10. Naturally, single player will not be affected by Online Pass. The game ships in March for PC, Xbox 360, and PS3.

Source: Shacknews

The Ultimate Fighting Championship filed a lawsuit on Thursday against publisher Ubisoft, claiming that the packaging for its new Kinect fighting game, Fighters Uncaged, infringes on the trademarks of the UFC. Attorneys (Lewis and Roca LLP) for UFC parent company Zuffa LLC charged that the phrase on the back-cover of the new Ubisoft game for the Xbox 360 is an infringement of its trademark.

The offending phrase is "Become the ULTIMATE FIGHTING weapon!"

Zuffa's lawyers claim that the phrase is nearly identical to the UFC’s trademarked Ultimate Fighting name. It may also confuse consumers who are looking for the company's games like the "Undisputed" series published by THQ and the "Sudden Impact" game.

The lawsuit seeks an injunction blocking the sale of the game, removal of the infringing phrase from the game's packaging, unspecified damages, and court costs.

Once in awhile a politician or an executive trips up and tells the truth. This time out, it's THQ CEO Brian Farrell. Speaking to CNBC, Farrell tells Chris Morris that the price of videogames are too damn high - just like the rent in New York. The conversation began when Farrell was discussing the price of MX vs. ATV when it releases next year. Farrell pegged the price of that game at $40.

“I know investors worry about price points,” he says. “When we think about this business, we wonder if we can turn it on its head a bit. How many users can we capture? … The real key is expanding in the installed base.”

Game industry group TIGA is using comments from a THQ executive to further press for tax relief for the videogame industry in the UK.

Speaking to GamesIndustry.biz, THQ Executive VP Danny Bilson called the talent in the UK “extraordinary,” and while he would love to see his company build a new studio in the region, it won’t happen anytime soon because “it's all about money at the end of the day.”

THQ opted instead to build a new 400-employee studio in Montreal, where it will receive tax breaks of 37.5 cents for every dollar spent on labor costs, which Bilson called a "huge win" and would enable the developer to "put more on the screen."

Bilson added: