THQ Nordic and Koch Media have just announced a 121 million euro ($150.7 million) merger. Since Koch is the parent company of Deep Silver, Volition, and Dambuster studios, the deal means that THQ, makers of Darksiders, Red Faction, and Elex, will now have full ownership of AAA franchises including Saints Row, Dead Island, and Metro. It also means that it will rake in the benefits from the recently released IP Kingdom Come: Deliverance and the upcoming Shenmue 3 (if it ever gets finished).
According to the press release, “[Koch Media and its owned affiliates] will continue to operate as independent entities. [However, THQ Nordic will] closely monitor and delegate resources… to ensure quality and a healthy return on investment on [Koch's] large in-house development projects.”
The move comes after some internal restructuring within Koch that was related to the poor performance of Homefront: The Revolution and Agents of Mayhem. Thanks in part to the sizable write-offs of those two IPs, Koch went through a management overhaul and is now much more careful in “its selection process for development of IPs.”
“With the competence, THQ Nordic possesses on management level, Koch Media will be better positioned to deliver the full potential of its development projects in the future.”
Koch Media might have had its struggles, but it still holds great potential. During the first three quarters of its 2017 fiscal year (ending March 31, 2018), the company netted about $37 million in earnings before interest and taxes. However, the company overhead was so high that EBIT was only about 10 percent of its total sales.
THQ Nordic is, of course, looking to capitalize on its acquisition. Fortunately, between the two companies, they have enough solid IPs and the talent to make them that with proper management there should be no problems in the money-making department.