THQ and Zynga have both been giants in their time, and both are worth almost nothing now. THQ’s revenues peaked at $1.03 billion in its 2008 fiscal year. Zynga’s sales last year were above $1 billion. But times have changed, and now the stock market values both companies at virtually zero.┬áComparing the two makes for an interesting study in how the market values game companies.

Stated simply, if you were going to buy Zynga, you would pay $1.69 billion in the stock market based on yesterday’s stock price of $2.16 a share. But Zynga has $1.53 billion in cash. That’s not counting Zynga’s real estate assets and other properties that bring its total assets to $2.6 billion. Subtract $751 million in liabilities, and that means Zynga effectively has a negative value of $159 million. [Update: for clarity, we would note that the net “enterprise value” of Zynga is negative]. If you bought Zynga at its market value today, you would get more cash back in the long run. In many ways, that’s kind of ridiculous.

“Sad for Zynga,” said Michael Pachter, an analyst at Wedbush Securities.

Is there a point to this exercise? We are talking apples in oranges, in terms of the type of game companies we are comparing here. But it is instructive to explore whether there is much sense behind the valuations of these companies.

Some have speculated that this makes Zynga a takeover target. But they forget that Mark Pincus (pictured above), the chief executive of Zynga, has voting control over Zynga. Unless he wants to sell out at such a low price, no one will succeed in taking over Zynga. In fact, one of the biggest buyers of Zynga stock is going to be Zynga, since the company authorized a $200 million stock buyback program.

Why is Zynga’s price so irrationally low? Lack of confidence. Analysts have pointed out that investors don’t believe that Zynga can pull out of its decline, even though it has around 3,000 employees creating new games. Zynga has lost money for a couple of quarters and projects another loss in the current fourth quarter. If Zynga reports some good news on that front, you can bet that its stock price will bounce back.

Zynga’s value in the market should logically be much higher than it is. But Zynga has had a string of negative news lately, starting with a weak summer quarter and the departure of a number of executives, including No. 2 executive John Schappert.

Still, it is startling to see that Zynga, valued at $9 billion just a year ago, could possibly be worth anything near that of THQ.

THQ reported losses this week and said it was evaluating its strategic options, meaning it was up for sale. It delayed three big games and that could put it in danger of running out of cash.

THQ said it has $36 million in cash but has borrowed $21 million on its credit facility, resulting in net cash of about $15 million. THQ also has about $100 million in loans coming due in August 2014. That’s enough to put its net cash value into the negative. THQ’s stock price today is $1.22 a share, which gives the company a market value of $8.36 million. That’s for a company that is generating around $350 million a year in revenues.

Overall, THQ has $265 million in assets and liabilities of $306 million. So if you bought THQ at its current price, after accounting for its cash anddebt, you would be out $32 million. All in all, dishing out money for Zynga is a better bargain than buying THQ. No doubt the market valuation is just as hard for Brian Farrell (pictured below), the chief executive of THQ, to swallow as it is for Pincus. There is on THQ’s takeover status. Clearly, the company has been in a decline for about five years, as digital gaming takes its toll on traditional game businesses.

But the difference between THQ and Zynga is that Zynga has been, for most of its five-year history, one of the disruptors of the game business. THQ has been one of its victims. Does it make sense that these companies are virtually worth zero dollars? Of course not. But that’s the way it is in today’s snapshot of valuations on Wall Street. If this is still the case in six months, I would very much be surprised.