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Sega Buys Relic; THQ Auction Results

By Ninjabutter - 23rd January 2013 - 23:17 PM

After filing for Chapter 11 bankruptcy protection five weeks ago, game publisher THQ's assets went to the auction block today, resulting in several studios and titles changing hands. While some of the details are still being resolved at the time of this writing, the results are generally conclusive for former THQ studios Relic Entertainment, THQ Montreal, and Volition, as well as the Homefront, Metro, South Park, and relatively unknown Evolve game franchises.

Of the most immediate interest to us here at GameReplays, Relic Entertainment, the studio behind Company of Heroes, Dawn of War, Space Marine, and Homeworld (among many others), has been acquired by Sega Corporation, one of the longest-standing video games companies in existence and a name familiar to many RTS fans for its Total War series. While some Relic staff have already left the company for other positions, including former studio head Alex Peters (who is now employed by Activision), it is speculated to be in Sega's favor to offer the Relic team fair enough wages to retain them during the transition, rather than purchasing the company only to then restaff it.

The results of the THQ auction, as reported by VentureBeat, are as follows. All prices are in United States dollars.
  • Relic Entertainment [Company of Heroes, Dawn of War, Homeworld, etc.]: Bought by Sega Corporation for $26.6 million, narrowly beating Bethesda's offer of $26.3 million.
  • Volition [Saints Row, Red Faction, etc.]: Purchased by Koch Media for $23 million, handily beating Ubisoft's offer of $5.4 million.
  • THQ Montreal [1666]: Purchased by Ubisoft for $2.5 million.
  • Vigil [Darksiders]: Unsold. Vigil remains part of THQ for the time being.
  • Homefront franchise: Purchased by Crytek for $500,000.
  • Metro franchise: Purchased by Koch Media for $5.8 million, exceeding Ubisoft's bid of $5.175 million.
  • South Park franchise: Purchased by Ubisoft for $3.2 million.
  • Evolve franchise: Purchased by Take 2 for $11 million. Turtle Rock Studios also bid, but only $250,000.
Notably absent in the bidding was gaming powerhouse EA, which had expressed interest in the Relic studios shortly after THQ's bankruptcy announcement. It is also quite obvious by this stage that Clearlake Capital, the company which backed THQ's chapter 11 protection filing, will not actually be purchasing the publisher.

Following the sales of their various assets, THQ CEO Brian Farrell and President Jason Rubin released an in-house letter to all of their remaining staff concerning the future of the company. As reported by Kotaku, the letter in full is as follows:

QUOTE
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.

Sincerely,

Brian Farrell
Chief Executive Officer

Jason Rubin
President


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