THQ Auctioned off : SEGA Buys Relic

In the wake of THQ filing for Chapter 11 bankruptcy and the subsequent disapproval of the Clearlake Capital bid proposal by the courts, the constituent parts of THQ were auctioned off a few days ago. There were several major assets to be auctioned off but the key one for everyone in the Company of Heroes community was, of course, Relic Entertainment.

The Vancouver based game developer, who were behind Company of Heroes, Homeworld and the Dawn of War RTS series, are also currently developing and close to the retail release of Company of Heroes 2. The winning bid for Relic Entertainment came from SEGA, standing at a bid of 26.6 million USD. The former console giant has stated an intention to expand their current range of PC based games and John Cheng, the President and CFO, SEGA of America commented; “We are thrilled to have Relic Entertainment join the SEGA family. The acquisition is a strategic fit and a critical step in growing our business".

SEGA already owns the Creative Assembly studio, who make the highly acclaimed Total War series. There are still limited details at this time and Relic have yet to officially meet with SEGA in order to outline their strategy and plans going forward. However, Company of Heroes 2 Lead Designer, Quinn Duffy has said that everyone is excited to work with SEGA. Quinn released the following statement on behalf of the Relic team :

Hey All,

First off, I’ll be posting this on a number of different community sites – sorry up front for the form-letter nature.

So, big news over the last few days, some bad, some good.

First off the bad news. I’m sure most of you will know this; some very good people have lost their jobs, and a company with a long legacy and a great relationship with Relic is no more. I’d like to express on behalf of the COH2 team and – I hope – the community at large our sincere thanks and admiration for what THQ has done for Relic and for our games over the years. They brought you Company of Heroes, and they worked hard to keep us going through the years. We shared stresses and triumphs and got more done with limited resources than I dared think possible because we worked with smart, resourceful people doing their best every day.

Publishers are much maligned, big game companies are often seen as evil yet the fact is they facilitate our hobbies as consumers, they help us enjoy the love of gaming and they bring enjoyment to millions. Do they do it as a business? Yes, of course, but their role is critical yet often disparaged. Truth is, a company like Relic could not deliver a game like Company of Heroes on its own. We could not ensure millions of players enjoy Dawn of War or Space Marine. We could not fund or develop raise awareness of Company of Heroes 2 on our own – it takes a real partnership.

It has always boggled my mind when we start putting credits together at the end of the game and you see just how many people it takes to get a big game finished. For a developer like me, a publisher isn’t a faceless corporation; THQ was Tony, Simon, Jon, George, Suzanne, Danny, and Bobby. It was Jason, and Ron, and Brian. I want to thank them all. These were people we spent time with and laughed with, we traveled together over great distances, we shared stories of our families, we faced challenges. THQ was people we spoke with every day, people who exhibited great passion about our games and the industry. We’ll see their contributions again soon, I’m sure.

The good news is that Relic and Company of Heroes 2 are intact. Relic will continue moving forward with Company of Heroes 2, but we have some gaps on our team in the short term. As you know we’re without our community manager, Bobby. Special thanks to him for his tireless efforts and the great rapport he built in the COH community.

What’s next? I can only personally speculate that Relic has unique value for Sega; that they liked what we were doing, and that they will want us to continue what we are doing. I know they’re excited. Apart from that, we don’t have a lot we can talk about yet – if you can use Google, you likely have the same information we do. We promise we’ll try to tackle the transition as efficiently as possible so that we can get back to Company of Heroes 2 as quickly as we can.

The team is raring to go, we’re as happy as we can be about our situation, and COH2 is looking and feeling better every day. Our joy at being able to continue on the game we love is tempered with concern for our colleagues at THQ and other studios but as clichéd as it may sound, the show must go on.

Stay tuned.

Quinn Duffy
Game Director, COH2

Unfortunately the failure of the Clearlake Capital proposal to be approved by the court means that THQ is no more. THQ's CEO, Brian Farrell and President, Justin Rubin released the following letter to their staff:

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

There has been mixed reaction to SEGA's purchase of Relic in the community thus far but it has mostly remained positive and the Relic employees seem highly positive about it as well. Unfortunately on a sadder note the demise of THQ means that our beloved community manager Bobby 'THQLynx' Miller will no longer have a job. From everyone at COH2.ORG and on behalf of the COH community we'd like to thank him for his great work and wish him all the best in the future, hopefully as SEGA's new community mananger!