Back in 2007 THQ had a market cap over $2 billion, today it is resting at a piddly $35 million. Since March 2011 their market cap has fallen by some $275 million.

They have really backed themselves into a corner these days. Just take a look at how their market cap has nosedived since 2009.

Last week THQ announced another round of layoffs, 118 people this time.  Relic Entertainment in Vancouver and Vigil Games in Austin both were both hit.  THQ also announced they are changing the focus of Warhammer  40,000: Dark Millennium. Instead of an MMO, the game will now be a single player online game.

With THQ’s massive layoffs since the beginning of 2011 (they have laid off almost 600 people), the company is down to 5 studios:

Back in January THQ had announced they were closing their Kids, Family and Casual Division to focus on core games. When THQ closed their kids division they not only shelved the uDraw but also their licenses with Nickelodeon, Mattel and Disney/Pixar.

To be clear, there IS a market for kids games, only it is becoming more and more platform agnostic. Just look at Activision’s success with Skylanders Spyro’s Adventure. Launched last October, Skylanders was the #1 selling kids title for the year according to NPD. Activision has said the new Skylanders franchise has sold more than 20 million toys and brought in $200 million in revenue. Today Activision announced Skylanders Cloud Patrol for the iPhone.

You don’t think kids have enormous influence on games like Angry Birds, Fruit Ninja, and Minecraft on tablets? These are free to play games and completely different games from what THQ was trying to develop in the kids’ space.

Let’s hope THQ can pull off a miracle.