Midway Games, famous for developing the Mortal Kombat franchise and other games, has filed for Chapter 11 bankruptcy protection. They cite the onset of debt troubles as the cause.
Midway ran into this difficulty after media baron Sumner Redstone sold his 87 percent stake to private investor Mark Thomas. This triggered a change-of-control provision that allows shareholders to sell their shares. Midway warned share holders earlier that they wouldn’t be able to pay if asked for money back. Looks like they were telling the truth.
Mr. Redstone sold his stake after losing hundreds of millions of dollars last year while the stock tanked. This comes after almost nine years of straight losses starting in June 2000.
Midway says that the Chapter 11 filing includes only operations within the U.S. and that they will continue as a player in the videogame industry.
This is still sad news. With other former giants bleeding cash or closing up shop, these are going to be dark times for the supposedly recession-proof games industry. Get better soon, Midway. Without you, where will I ever find a use for all those Mortal Kombat combos I memorized?
Sad to hear. I hope there isn’t too much suffering. Nine years of consecutive losses is a lot though.
How would the video game industry supposedly be resession proof? I would imagine these luxury items will be the first to go from family budgets if times get tough.
Surprisingly the game industry was looking pretty good for the most part, if I remember correctly. At least not showing the same level of KO as the rest of tech.
There is no way. A recession is a decrease in overall economic expansion (or just isolated to mere markets). One of the causes of a recession is that nobody is buying goods anymore… i.e., they’re saving their money instead of spending their money.
You could “slide” through a recession if you have enough savings, though I doubt even millionaires will slide through this one.
There are other factors, but that’s the cause of this recession: nobody buying, because nobody has any money left (probably the only countries with money left are Asian countries)
No more MK?? :(
It’s sad to see there in no more Mortal Kombat. However, what’s more sad is that the executive team actually got paid a lot (CEO got paid $4.5M in last 2 years) while this company crumbled:
http://www.wealthalchemist.com/Blog/2009/02/video-games-recession-proof-midway-chapter-11/