‘Homefront’ Reviews Lead To THQ Stock Fall, Price Dropped Already

There’s an old saying that any publicity is good publicity, but after the inital reviews of recently-released shooter Homefront painted a less-than-flattering picture, the game’s publisher may disagree. With Homefront, the story-based FPS from developer Kaos Studios launching yesterday to review scores ranging from the low to high-seventies, THQ‘s shareholders headed for the door in significant amounts. After the first day of release, the publisher’s stock dropped 21%, and major retailers Amazon and Wal-Mart have already marked the game down to a retail price of just $42.

It’s difficult to objectively see a score of 72-74% as a failure instead of a moderate success, but it seems that investors are following a very different way of thinking.

With the tolerance for anything but a triple-A experience getting lower and lower by the day, publisher THQ found out just how hard-hitting a little disappointment can turn out to be.

When the market closed yesterday, THQ stock was trading at $4.69, a 21% drop from its previous value. It doesn’t take an industry analyst to see that investors were clearly hoping that they had a winner with Homefront, and decided to jump ship when the game was revealed to be less than perfect.

As was noted in our review of Homefront, the game still has plenty going for it with real moments of brilliance, but in the end fell short of the publicity that had preceded it. But in this new age of constant blockbusters, investors just aren’t willing to accept ‘good enough,’ with Janco Partners analyst Mike Hickey making the point clear:

“This score is a bit of a disaster for THQ and the share price today is reflecting that…The market is a quality-driven market, (and) you need at least a score of 80 and above on Metacritic to do well.”

With the current Metacrtic rating for Homefront currently sitting around 73% across all platforms, we now know where investors draw the line. Again, it seems a bit unrealistic to operate under the assumption that a score of 7/10 represents lower quality, but THQ’s investors aren’t the only ones backing away from what they see as a disaster.

Today, major retailers Amazon and Wal-Mart have both made a move to rid themselves of copies of Homefront, dropping the retail price $20 to the more-enticing cost of $41.96. A 30% price drop speaks volumes, and whether the retailers are lowering prices to play on the safe side, or announcing an all-out retreat, it doesn’t bode well for the future of the game.

THQ has already stated that they need to sell 2 million copies of Homefront to turn a profit, which in itself would be reason enough for savvy investors to have their doubts about continuing a relationship with the game’s publisher. Not to say that betting on your future is necessarily a bad idea, but it is a risk – a fact that THQ is now aware of.

What do you think of a game company’s future being put into jeopardy by releasing a game that doesn’t net a Metacritic rating of 80 or above? Are investors and executives setting the bar for acceptable titles far too high? What does this mean for a potential sequel to the game?

The next few weeks will undoubtedly be  a stressful time for the people behind Homefront, available now for the Xbox 360, PS3, PC, and OnLive.

Source: Gamespot, IndustryGamers