Mortal Kombat and Wheelman publisher to lay off 25 percent of workforce, close Austin studio, cease development on multiple unannounced titles.
Earlier this month, Midway Games lost its highest-profile supporter when media mogul Sumner Redstone ditched his majority stake in the publisher for just $100,000. That triggered change-of-ownership clauses in the company's loans, allowing creditors to demand repayment of $150 million within 30 days.
While it's still unclear how Midway (whose total assets amounted to less than $168 million as of September 30) will pay that debt, the publisher today instituted an array of cost-cutting measures to keep afloat. To start, the company will lay off 25 percent of its global workforce, roughly 180 full-time employees. Additionally, Midway plans to shut down its Austin, Texas, studio entirely and has suspended development on multiple unannounced "non-core" games previously scheduled for release in 2010 and 2011.
"The cost-reduction measures are vital for us to rationalize our operations and provide the resources necessary for our core properties to succeed," Midway president and CEO Matt Booty said in a statement. "These initiatives, along with the other steps we have taken this year, are a response to the specific challenges we are facing at Midway, many of which have been amplified by the current economic conditions."
The shuttering of Midway Studios Austin comes just months after the publisher had already made deep cuts to the operation. In August, Midway laid off roughly 90 of the 130 or so employees there, equal at the time to 10 percent of the publisher's global workforce.
Midway Studios Austin was originally known as Inevitable Entertainment until October of 2004, when Midway purchased the studio outright. Its previous games included Sierra Entertainment's multiplatform The Hobbit in 2003 and Tribes: Aerial Assault on the PlayStation 2. For Midway, the Austin studio revamped the Area 51 franchise with a 2005 first-person shooter on the PC, Xbox, and PlayStation 2. Midway Austin's final released project was last year's Blacksite: Area 51 for the PC, Xbox 360, and PlayStation 3.
As of press time, Midway shares were trading at $0.17, down about 10 percent from their previous close of $0.19.
that's sad I was really thinking about buying that new mk even though i thought vs batman and all was kinda dumb.. even if we all bought 1 we couldn't save them... I don't really like them because of what they did to johnny cage is was my fav in mk :) I would of loved to play as him in mk3 lol.
so long as we carry on buying games, they will carry on being made. I buy games i feel are good. if midway isn't getting enough of my money to survive so be it. I'll carry on buying good games none the less. With their resources can it be that hard to make a good game? i'm sure the laid off employees will get hired at better studios if they are good and if not they can make iphone games in their basement
That's what they get for not making anything worth playing for years. In this industry it's adapt or go the way of the dodo. Forget the industry, that's the way it it period. I mean ... their last resort was yet another Mortal Kombat game. If they were going to make a 3D fighter they should have put more effort into it. There are too many other 3D fighters that are ... well ... better ... I wonder how much the DC licensing cost them ...
Does anyone miss the old Mortal Kombat atmosphere? Seems like too much....3-D to the game now (my personal opinion is that they did this to make it more realistic but it's doing the quite the opposite). The new mk vs dc did better job at this but not quite....I still miss MK 1,2,3 atmosphere and simple game play (even part 3 combo system was more fun compare to their franchise nowdays)
looks like were goin to miss mk, but i played every mk game there made and i have the new mk ( mk vs dc ) and its a great game
Yeah I think that the MK team should be looking for a new home right about now. Notice I just said looking. That property is actually worth quite a bit of money, and I bet a decent publisher such as Ubisoft could do the franchise justice in distribution. Provided of course that the series gets back to doing fatalities.
Christ :shock: bad luck midway, hopefully they'll manage to get themselves back up though, i hava feelin that MK vs DC didn't help tings all that well though, hasn't been doin so good sale wise, least over here in the UK.
It's too bad. I do like some of their games. I was hoping Psi-Ops would get a sequel and I was really looking forward to Wheelman.
LindBergh2007 Posted Dec 17, 2008 3:56 am GMT otanikun, I hope they don't got under too. But this is what happens when the software market is crashing. If Midway goes under, it would be a huge blow to the U.S. gaming market and we certainly don't want that to happen. But I still expect EA for file for Chapter 11 soon.
@shadowblade99: "it's not cool to lay off people, even if there are only a few notable franchises in the company." Considering the incredible amount of debt they now have to pay to the bank, while it might not be "cool", they don't have much choice. You can't pay that kind of debt back with money you don't have while still paying your entire current workforce.
So basically, Midway is done for. Oh well, hopefully someone cool like EA, Atari or Capcom picks up Mortal Kombat when they collapse.
First off the president's name is Booty. That is hilarious. Secondly, it's not cool to lay off people, even if there are only a few notable franchises in the company.
what a nasty headline. "trims fat"? that's pretty callous & insulting to the people lost their jobs.
i bet they blame piracy. Still I hope they have enough credit left to release Wheelman & This is Vegas.
To the people and famlies this will effect I feel bad. However other than the old school mortal kombats I could care less about midway. They are right there next to atari in my opinion.
@Faks Its not just jumping to Midway... This could affect the whole global gaming industry... Now that's messed up on what you said... What if you worked there and got laid off... Try to put yourself into someones foot steps before you talk...
Its horrible to hear the news more people are losing their jobs these days. I hope for the best for all of them and that they get back on their feet soon. On a second note, its sad to see the development teams go. They didn't make the choices that led Midway to where it is today. The directors, producers, the board members did and they are probably still there. If Midway survives, they'll still be in trouble because the root of the problem is still there. I hope Midway survives to make good games again
Yeah, I just picked up Stranglehold: Collector's Edition at Wal-Mart for $9.99 yesterday. That's probably not a good sign.
This is just the beginning...every developer and publisher will be making changes in order to keep afloat...what does this mean for us, the consumers...not sure, but it can't be good...
Survival of the fitest, and Midway is anything but. With all the crap they spewed out in the last decade you ain't gonna hear violins as this ship goes down. Bye bye Midway.
"Uhg... Gamespot, must you call the closing of a game studio "shuttering"? It sounds REALLY freakin stupid. Just say "the shutting down of", or "the closing of". Sounds MUCH better. "Shuttering" makes me think of window shutters, lol." and what do you think happens when a store or business closes down? they pull down the shutters to prevent break-ins. imagine that. shuttering is a good way of putting it.
You know I honestly think they're in denial now. They had 30 days as of DEC 5th, 2008 which means come January 4th, 2009? They still will owe 240M. Cutting jobs now? is the last thing they should be doing they could have used said work force to help them get out of debt. Why'd they buy that Austin studio anyway. They would have been better off without Midway.
17 cents a share, huh. If Midway managed to get it's stuff together, a smart buyer could make some good money at that price.
Uhg... Gamespot, must you call the closing of a game studio "shuttering"? It sounds REALLY freakin stupid. Just say "the shutting down of", or "the closing of". Sounds MUCH better. "Shuttering" makes me think of window shutters, lol. :roll: :P Anyway, Midway made some of my favorite games over the years, but honestly, they haven't been releasing the best titles lately, and they seem to be paying for it. I mean, I liked Blitz II, but it didn't add enough. It felt more like Blitz 1.5 than a full-fledged sequel. MK vs DC looks like it is a good FIGHTING GAME, but I didn't want just any old fighting game, I wanted a new MK. Without the blood and over the top gore, it just isn't MK. Midway, think back to the 16 bit era. Remember WHY the Genesis version of MK sold better than the SNES one? It sure wasn't the graphics or sound, it was the BLOOD. Why you'd remove most of the blood in this day and age for some gimmick is beyond me. Anyway, I wish them luck. Who knows, maybe they'll release another really good game if they pull through. You know, learn from their mistakes. If they do go down though, I'm sure MK and the other major franchises will go to other studios, which will HOPEFULLY take them in the right direction.
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