| Type | Public (NYSE: MWY) |
|---|---|
| Founded | 1988[1] |
| Headquarters | Chicago, Illinois, USA |
| Key people | Matt Booty, CEO, former Senior Vice President |
| Industry | Video game |
| Products | Mortal Kombat, Spy Hunter, NBA Jam, Rampage |
| Revenue | ▲US$150.1 million (2005) |
| Operating income | ▼-US$108.5 million (2005) |
| Net income | ▼-US$112.5 million (2005) |
| Employees | 820 (2006) |
| Subsidiaries | Atari Games (1996–2003), Cookie Jar Group |
| Website | http://www.midway.com |
Midway Games (NYSE: MWY) (formerly Midway Manufacturing) is an American video game publisher. Midway's legacy includes landmark titles such as Mortal Kombat, Ms. Pac-Man, Spy Hunter, Tron and NBA Jam. It was listed as the #19 video game publisher in September 2005 and the #20 in September 2006 by the magazine Game Developer.[2]
Sumner Redstone, the head of Viacom/CBS Corporation, was a large investor in the company; he owned directly and through his companies 87% of Midway at the end of 2007.[3] In December 2008 he sold all his stock to "Mark Thomas", a private investor about whom little is currently known, for $100,000 plus ~$70m of debt.[4]
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Midway Mfg. Co. began in 1958 as an independent manufacturer of amusement equipment. It was purchased by Bally in 1969. After some years making mechanical arcade games such as puck bowling and simulated western shoot-out, Midway became in 1973 an early American maker of arcade video games. Throughout the 1970s, Midway was very close to Japanese video game developer Taito, with both companies regularly licensing their games to each other for distribution in their respective country. Midway entered the consumer market in 1977 by releasing the Bally Home Library Computer; the only home system to ever be developed by Midway.
Midway's real breakthrough success came in 1978, with the licensing and distribution of the seminal arcade game Space Invaders in America. This was followed by the hit U.S. version of Namco's Pac-Man (1980). Ms. Pac-Man followed in 1981.
In 1981, Bally merged its pinball division with Midway to form the Bally/Midway Manufacturing division. Three games released that year: Solar Fox, Lazarian and Satan's Hollow were the first to feature the Bally/Midway brand. From the late 1970s through the late 1980s, Midway was the leading producer of arcade video games in the US.
The Bally/Midway division of Bally was purchased in 1988 by the arcade and pinball game company Williams Electronics Games through its holding company WMS Industries Inc. The acquisition by WMS marked the end of the original Midway. Although WMS retained many of Midway's R&D employees, only two game designers were retained: Rampage designers Brian Colin and Jeff Nauman. Midway moved its headquarters from Franklin Park, Illinois to Williams's headquarters in Chicago, and WMS established in 1988 the new (and current) Midway company as a Delaware corporation. WMS obtained the right from Bally to use the "Bally" brand for its pinball games since Bally had completely left the arcade/pinball industry to concentrate on casinos and slot machines.
Under WMS ownership, Midway initially continued to produce arcade games under the Bally/Midway label while producing pinball tables under the "Bally" brand. In 1991, however, Midway absorbed Williams' video game division and started making arcade games under its own name again, without the "Bally" part (pinball tables continued to be produced under the "Bally" brand until Midway discontinued this part of the business in 1999). In 1996, WMS also purchased Time-Warner Interactive, which included Atari Games, part of the former giant Atari Inc. 1996 is also when Midway changed its original corporate name Midway Manufacturing to Midway Games Inc. due to its entrance in the home console market. The original arcade division of the company became Midway Amusement Games and the newly created home division was known as Midway Home Entertainment.
In 1998, Midway was sold by WMS to its shareholders, making Midway an independent entity for the first time in almost 30 years. Midway kept Atari Games as a wholly owned subsidiary as part of this spin-off. Despite the split off, Midway retained some of the WMS executive staff and used common facilities with WMS for a couple more years. Although Midway no longer belongs to WMS, no longer uses any facilities of WMS and has terminated all material agreements with WMS, Midway to this day shares one director with its former parent company.
In late 1999, Midway left the pinball industry in order to concentrate on video games. In January 2000, Midway changed the name of its "Atari Games" subsidiary to Midway Games West to avoid confusion with the other Atari company, then owned by Hasbro Interactive.
In June 2001, Midway shut down its arcade division due to financial losses. In February 2003, Midway closed Midway Games West, putting an end to what was left of the original Atari. In October 2003, Midway said it expected to see $100 million in losses in 2003, on sales of about $100 million.
In 2004 Midway began a purchasing spree of independent video game development studios which "strengthens our internal product development team and reinforces our ability to make high quality games" (from Midway's May 2005 quarterly report). In April 2004, Midway acquired Surreal Software of Seattle, Washington. In October 2004, they acquired Inevitable Entertainment of Austin, Texas (now known as Midway Austin). In December 2004, they acquired Paradox Development of Moorpark, California.
On August 4 2005, Midway acquired the privately held Australian-based developer Ratbag Games. The Studio was renamed Midway Studios-Australia. Four months later, on December 13, Midway announced to its employees there that it was shutting the studio down, leaving its employees based at that studio without a job. Two days later, on December 15, the studio was closed and their Adelaide premises emptied.
As of 2007, Midway Games is currently in a legal battle with Mindshadow Entertainment for the Psi-Ops video game rights. According to Loredana Nesci and Steven Lowe, attorneys for Mindshadow, Midway Games copied Psi-Ops's story from a screenplay written and owned by their client. On December 2, 2008 Judge Florence-Marie Cooper of the United States District Court for the Central District of California issued a ruling granting summary judgment on all counts in Midway's favor. Judge Cooper found no evidence of copyright infringement. Case No. 2:07-cv-00967-FMC-JCx (docket entry No. 175) [1]
Recently Midway CEO David Zucker has revealed his company plans to open a new casual games portal. Zucker said that the successes of internally-developed mass-market Nintendo DS and Wii games Touch Master and Game Party had inspired the company by "returning to its roots"—the Midway brand first rose to prominence in the arcade era.
On March 6 2007, Midway reported its 2007 full year and Q4 financials, reporting revenues down just under $10m to $157.2m for 2007 and with losses growing to $97.4m, up from $77.8m year on year. The firm announced that it had entered into a new $90m credit agreement with National Amusements, terminating its $30 credit facility with Wells Fargo. However, CEO David Zucker remained upbeat, saying the introduction of PS3 exclusive Unreal Tournament 3, and the company's growing success in mass-market games, were setting it up for a "significant 2008".[5] On March 21, 2008, David Zucker resigned as CEO. He was the third executive to resign in three months from the company. Succeeding Zucker is Senior Vice President Matt Booty on an interim base.([2] Chicago Tribune)
On November 21, 2008 Midway games received a NYSE delisting notice since the stocks fell under one dollar per a share.[6]
On December 2, 2008 Sumner Redstone sold his 87 percent stake in Midway Games to Mark Thomas, a private investor. Thomas paid approximately $100,000, or $0.0012 per share. Thomas also took on $70 million of Midway Games' debt. National Amusements took a significant loss on the sale, however the loss improved the company's tax situation. [7]
On Decmber 5, 2008 the Chicago Tribune reported that Midway would default on $240 million of debt after the recent sale of stock to Mark Thomas triggered clauses in two bonds allowing the bondholders to ask for full repayment. [3] According to Variety Midway currently has $10.3 million in assets.
Some of Midway's arcade system boards:
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