Coin-OpEd is GameSpot News' place to put aside impartiality in order to discuss, examine, and analyze the industry with a more opinionated eye. The views expressed herein are the author's own, and may not reflect those of GameSpot or its parent company CBS Interactive.

　　If you're ever tired of hearing game publishers talk about how great they are, try taking a trip through their Securities and Exchange Commission filings. Publicly traded companies are essentially allowed to lie to the public as much as they want, but they have to play it much straighter when it comes to the government and their own investors. While looking through THQ's annual report for a story last week, I was reminded just how different the messaging from the company is depending on who's listening.

　　Take the company's section about "risk factors," for example. This is sort of a "Murphy's Law" smorgasbord of all the catastrophically terrible things that could happen to throw the company way off track, so investors who might not be familiar with the ins and outs of the industry have some understanding of just how precarious a company's financial standing really is. THQ's risk factors take up about seven pages, and range from the obvious (we have to keep making and selling games to be profitable) to the still-obvious-but-shockingly-honest (we may not get hot licenses because other companies have more money and name recognition and thus can better market games than us).

　　More than anything else, the risk factors portray the publisher as an entity not in control of its own destiny. This isn't limited to THQ, by the way. It's sort of remarkable anything in this industry gets made because every company has a delicate web of interests to maintain, and it just takes a single weak thread to bring things crashing down. Sony, Microsoft, and Nintendo are three such crucial threads. As THQ points out in its report:

　　"Our platform licenses require that each title be approved by the manufacturer. The manufacturers have the right to review, evaluate and approve a prototype of each title and the title's packaging and marketing materials. Once a title is developed and has been approved by the manufacturer, the title is manufactured solely by such manufacturer or a designated vendor of the manufacturer. ...The amounts charged by the manufacturers for both console discs and handheld cartridges include a manufacturing, printing and packaging fee as well as a royalty for the use of the manufacturer's name, proprietary information and technology, and are subject to adjustment by the manufacturers at their discretion."

　　So if you're a third-party publisher of console games, the big three have you by the short-and-curlies. They are the gatekeepers who decide whether or not your game gets to market. Oh yeah, and they're also the people making the big-budget, heavily hyped games that will likely be trouncing your game on the NPD charts next month, not to mention taking up all that valuable shelf space at retail. They might even pack their own game in with the system so new owners don't need to go out and buy anyone else's game, much less yours. And they have to approve your game every step of the way, right down to the box art and commercials you run for it. What other industry has companies seeking so much permission from their biggest competitors before they can introduce their products to market?

　　Then there's always the Entertainment Software Rating Board. The rating a game gets can be a huge problem, and not just if an expected M-rating slides over into an AO for Adults Only, as happened last year with Manhunt 2. That's obviously catastrophic because console makers don't allow those games to be sold for their systems, but a game that slips from a T-for-Teen to M-for-Mature could be problematic as well. The Federal Trade Commission has scolded the industry in the past for marketing M-rated games to children, so publishers don't--or aren't supposed to, at least--place their ads for adult games in media or locations targeted at children.

　　While those problems are common to all third-party publishers, THQ has a few risk factors that loom particularly large, specifically its reliance on licensed product. As mentioned in the article linked above, THQ gets more than 50 percent of its sales from games based on Pixar, WWE, and Nickelodeon.

　　The company has tried in recent years to grow its business based on wholly owned intellectual properties, but results have been mixed. Saints Row was a big hit for THQ, while efforts like Stuntman: Ignition and Juiced 2: Hot Import Nights underperformed so badly that the publisher shelved the franchises entirely.

　　Making matters worse, THQ's hold on its three major licenses appears a wee bit shaky from the outside looking in. The WWE has filed two lawsuits in federal court seeking to have its deal with THQ nullified. There's some question as to whether the WWE just wants to renegotiate its deal in more favorable terms or if it would prefer to walk away and have an Electronic Arts or an Activision handle the license, but rest assured that's still more uncertainty than THQ would like.

　　Then there's Pixar. THQ has made games based on all the Disney-owned studio's movies since Finding Nemo, but it looks like the parent company might want to bring development of those games back into the fold. Disney Interactive Studios is making a bid for legitimacy as a top-tier publisher and has already claimed the game rights for the upcoming Pixar sequel Toy Story 3. (Expect to see more license-holders try to start their own development in the future--Marvel got into the movie business with the Hulk and Iron Man flicks, and I could see it doing the same for games.) THQ has a few more Pixar movie-based games under contract through 2011, but it seems to understand the writing is on the wall, as it went ahead and picked up the rights to DreamWorks Interactive's 2010 animated film Master Mind. That deal is only for one game though, which hardly replaces the revenue stream provided by Pixar's powerhouse properties over the last five years.

　　Finally, there's Nickelodeon. Of these three big licenses, this appears to be the one THQ has the best chance of holding on to. It already has the game rights for series like SpongeBob Square Pants tied up through 2010. However, Take-Two's acquisition of the Nick Jr. licenses like Dora the Explorer could make it a strong challenger for the regular Nick license after 2010, especially if games like Dora sell well.

　　If I were the CEO of a third-party publisher, this is the sort of stuff that would keep me up at night. In short, THQ has to stay on the good side of Sony, Nintendo, Microsoft, the ESRB, WWE, Pixar, DreamWorks, and Nickelodeon if it wants to have a chance of meeting its projected profits in the coming years. And China, since it's starting an online Company of Heroes game there. And the government, since THQ notes as a risk factor the fact that "standard business practices in China may increase our risk of violating U.S. laws such as the Foreign Corrupt Practices Act." So if it can keep all those people happy, then all it has to do is make good games and convince gamers to buy them. Simple, right?

　　Brendan Sinclair is a GameSpot news editor, and has been covering the game industry since 1999.