THQ Will Take Huge Hit Due to PSN Outage

Posted May 9th, 2011 at 9:00 am

THQ has put a lot into their pricing experiment that debuts with the release of MX vs ATV Alive tomorrow. The idea has been that releasing a game at a lower entry price (in this case $40) will increase the user base who will then be more likely to spend on expanded downloadable content offerings. Unfortunately for the company they are now bracing for a significant blow to their plans with PSN being out of commission. 

It has almost been three weeks since PSN went down taking with it not just online play but the PSN store as well. Even if PSN were to come back in the coming days Sony has stated the PSN Store won’t follow immediately and may be down until June. That means THQ will be pulling in absolutely no revenue from what could amount to half of their consumers. Needless to say that is severely damaging when the structure they created is meant to rely on the sale of DLC.

THQ will have the 360 side to judge the results on but this still could change the outlook in the near term on DLC reliance. Many believe that digital delivery is the future of gaming, and a great deal of money has already been made from microtransactions, but particularly for PS3 consumers they may very well be less likely to spend in that manner in the future given the recent events and erosion in confidence.

Other companies are certainly taking a hit due to PSN being down as well (think EA Sports losing all Ultimate Team revenue) but none are hurt as much due to the timing or put so much into the reliance on DLC as THQ did in their championing of this experiment in financial meetings and with the press. This could even damage sales of the game considering the lack of online play and ability to download all the features that have been reserved for DLC.

The idea of the lower price point and offering increased DLC options made sense for secondary titles. This isn’t something that would have been considered for their prime WWE or UFC franchises. Still one now wonders how the company will view the idea when it is about to hurt them significantly due to something that is completely out of their control.