THQ stays alive after South Park is delayed and Darksiders II disappoints

After another abysmal quarter and the disappointing sales of Darksiders II, THQ gets a reprieve from its creditors and finds a potential new source of capital for the development of games like Saints Row 4.

THQ’s tumultuous 2012 continues apace as the company struggles to survive. After narrowly it narrowly avoided delisting from the NASDAQ stock exchange earlier this year, the publisher announced miserable earnings for the July to September quarter on Nov. 5. Its marquee 2012 release, Darksiders II failed to meet sales expectations, and THQ recorded a $21 million loss for the period. With a number of titles like Metro: Last Light and Saints Row 4 still in development while private investors remain disinterested in the failing company, THQ announced that it had contracts a private equity investment firm to try and find funding to keep the company moving. THQ announced on Wednesday that it has found potential funding but its future is far from secure.

THQ announced on Wednesday morning that it had entered into “exclusive negotiations” with an unnamed financial sponsor. The reason the sponsor is unnamed according to THQ is that it doesn’t want to make any announcements until a deal is set in stone. Why make an announcement at all? To reassure its remaining shareholders that bank Wells Fargo isn’t going to swoop in and seize the company’s assets to cover its unpaid debts. That’s the meat of THQ’s news: That a forbearance agreement with Wells Fargo gives THQ an extension into January before the bank forecloses on the company and its subsidiaries.

The end of the announcement brings news that THQ’s CFO Paul Pucino has resigned from the company. “We would like to thank Paul for his significant contributions over the past four years and wish him well in his future endeavors,” commented CEO Brian Ferrell.

Since joining THQ in 2008, Pucino helped THQ close nearly all of its international studios, cancel a number of franchises including Red Faction, MX vs. ATV, and Homefront, and see the company, as Ferrel put it in June, “hit rock bottom.”

If THQ gets its funding, will things turn around? It’s next game, the Obsidian-developed South Park: The Stick of Truth has been delayed, as has Metro: Last Light, Company of Heroes, and there is no concrete release window for Saints Row 4. THQ’s path forward past its January 2013 deadline with Wells Fargo is dim to say the least. As a whole, the company may be more valuable as an IP farm for another publisher to buy up than as an independent business.