By James Caldwell, PWTorch.com assistant editor

Video game publisher THQ is busy putting together the final touches on WWE's "Legends of WrestleMania" video game and working on the Smackdown vs. Raw series. Whether they stay in business to publish the next installment of SvR remains to be seen.

According to video game industry analysts, THQ has a "50/50" chance of staying in business after the recent economic downturn. THQ's cash on hand has dropped by 69 percent compared to two years ago. THQ CEO Brian Farrell says the business will survive, though.

"This is a good business," Farrell told the Los Angeles Times. "It's just not as big as it used to be."

Analysts suggest THQ could be bought out, but there aren't many video game companies that are in a position to buy another company due to an industry-wide slump. As the costs to produce a video game have increased, sales have decreased.

THQ is trying to adjust accordingly. "Budgets are bigger now, so we just can't make as many bets as we used to," Farrell said. "It's a matter of where you place those bets."

The company's strategy to stay in business is to focus on big titles rather than trying to create a bunch of titles. THQ's licenses with WWE and UFC give them a dependable market to draw from. Their "all eggs in one basket" strategy has to pay off, though.

"Our strategy is to focus on bigger titles," Farrell said. "The formula is to make great games and market them effectively. High review scores lead to high sales and high profits. We think we have a plan in place to do that and return the company back to profitability."

Caldwell's Analysis: So, what does this mean for WWE video gamers? First off, if sales don't increase for WWE titles, especially the "Legends of WrestleMania" video game that took 18 months to develop, then THQ will be in trouble. Shipments of the latest Smackdown vs. Raw game declined by 20 percent, which THQ pointed to in their most recent financial report as a significant contributor to their weakened financial position. THQ is leaning heavily on WWE right now to keep them afloat, so it's pretty much up to WWE fans who care about video games to buy the games to keep the games coming.

Link: L.A. Times story on THQ.

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