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THQ facing class-action suit for uDraw sales claims

by Steve Watts, shacknews.com, Jun 20, 2012 12:30PM PDT

THQ is facing a new legal battle, this time from annoyed shareholders who claim the company mislead them about the sales success of the uDraw tablet. The class-action complaint alleges that THQ made "materially false and misleading" statements about the health of the uDraw between May 3, 2011 and February 3, 2012.

GamesIndustry.biz reports that the complaint was filed in the US District Court for the Central District of California, on behalf of shareholders. It claims that THQ "recklessly disregarded" key facts, including: low demand for the uDraw on Wii, even worse performance on PlayStation 3 and Xbox 360, the need to to take back or offer price protection on hundreds of thousands of units, and a lack of reasonable basis to offer positive statements about the company. The suit is seeking damages on behalf of all THQ common stock owners.

Following weak sales of the device, THQ laid off 30 uDraw team members in December 2011. At the time, the company was still fairly positive about uDraw, saying the staff reduction would "increase efficiency and increase the focus of our organization."

Then in February 2012, THQ discontinued the peripheral altogether. "We were looking at Udraw as a bridge to the digital future," then-president president Brian Farrell said, "but the bridge to the digital future turned out to be a plank that we walked off."