Setbacks for latest game from Tomonobu Itagaki have THQ looking to hand off the project to another company as publisher cites profitability concerns.

THQ is distancing itself from Devil's Third. In an investor conference call today, the publisher confirmed that it was talking with other companies about taking the maiden project of Valhalla Game Studios off its hands.

THQ is looking to make a deal with Devil's Third.

"The profitability of Devil's Third was not competitive with our other releases," explained THQ CEO Brian Farrell.

There were two major reasons given for the project's change in status. First, the third-party company Valhalla had been using to make the game engine went out of business. Considering also the strengthening value of the yen against the dollar, THQ decided that the game no longer met its profitability profile.

Devil's Third was announced at the 2010 Electronic Entertainment Expo and made a splash as the first project for Valhalla Game Studios, the new developer founded by Dead or Alive creator Tomonobu Itagaki in the wake of his acrimonious parting with Tecmo. While Itagaki continued to do interviews to promote the project, little else was seen of it beyond the original trailer. Last year, Itagaki explained why the game was a no-show at the Tokyo Game Show but said to expect more information on it in early 2012.

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