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THQ under investigation over uDraw failures

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Trouble rears its head

udraw
udraw

THQ may be in legal trouble for not disclosing full information on the failed uDraw peripheral.

THQ is being investigated by a Georgia law firm for claims the publisher made about its failed uDraw peripheral.

Law firm Holzer Holzer & Fistel LLC will determine whether the publisher failed to disclose information in a timely fashion about the decrease in demand for uDraw on Xbox 360 and PlayStation 3.

According to the firm, THQ withheld information regarding the peripheral not meeting internal sales expectation due to differences between users on the Wii and those on Xbox 360 and PlayStation 3. If the publisher withheld information or made "false and misleading statements," it may have violated federal securities laws.

uDraw for the Wii shipped 1.7 million units during THQ's fiscal year 2011. However, after lackluster sales following the launch of uDraw on Xbox 360 and PlayStation 3, THQ slashed its third-quarter financial earnings forecast for that year by 25 percent.

The tablet has since been discontinued.