I remember when Acclaim and THQ went under and it did not seem to be a very long transition from being a major player to declaring bankruptcy. Was there any indication that THQ was in trouble before the uDraw disaster?
Yeah the THQ fiasco was very much a multi-faceted affair, and in fact the uDraw did fairly well on Wii at first in 2010, despite the relatively high price and cruddy software line up for it. Unfortunately THQ took those early sales figures as encouraging feedback, massively overproduced them for PS3/X360, and it became another massive albatross on their neck while they were closing studios left and right.
Earlier facets that led to their bankruptcy:
-THQ had always been big on licensed games, wrestling, ATV and biker games, etc. I don't think it's an exaggeration to say the bottom pretty much fell out of that market after the DS/Wii era. Cheap licensed games were moving towards browsers or free-to-play on mobile devices.
-2008 was the start of financial disaster for THQ (and the world economy, for that matter). They
closed several studios doing licensed movie games and pivoted to 'core game titles' (aka moe expensive games).
-2009 did even worse with their Nickelodeon/Pixar/Dreamworks type games largely gone.
They laid off 600 people and lost like a fifth of yearly revenue.
-2010 was a bit better, relatively speaking, due to
some success with the uDraw. I think they sold those tablets for 60-80$ so they were okay moneymakers.
-2011 they doubled down on uDraw, making versions for X360 and PS3
which were a sales disasters. Reportedly there were like a million of these unsold
in a warehouse somewhere. I bet they were really bummed about the Wii U tablet unveiling at E3 2011, too.
2011 also saw Homefront completely bomb, not sure if Call of Duty ate its lunch or people were just annoyed at that type of modern military shooter. Their
stock dropped 26% when the reviews came out(!!!)
I think the Saint's Row game of that year might've been a success, but they closed the Red Faction studio, the people who did De Blob.
-2012 was more of the same,
the CEO stepped down while they closed the Warhammer studios, sold the UFC rights to EA, and they began defaulting on loans.
So yeah, uDraw was a real boat anchor they were dragging along for sure, but I'm not sure it was the single reason of failure. THQ basically backed every wrong horse they could at this time; their licensed games business model was not future proof, they sold rights to their moneymakers (Warhammer, dirtbikes, wrestling, UFC) to others, and their pivot to 'core games' resulted in a string of over-budgeted flops (Homefront, Red Faction Armageddon, I'm not sure how Darksider 2 did) which Saint's Row just couldn't compensate for.
They were a mid-to-high tier publisher but just got squashed like so many other mid-tier companies in 2008-2012 were. Financial markets saw a real compression, where big players bought the remains of their bankrupt competitors for peanuts. Everywhere from banking to Hollywood to airlines saw mid-sized players collapse and become prey in cheap mergers for the market elite of their respective sectors.
In games this means the AA-titles pretty much evaporated in half a console generation, and I would argue this still holds today, where big publishers push out blockbusters and cheap phone cashgrabs only, while indie devs are starting to populate the lower-to-mid price tiers.