Midway CEO Zucker Departs, Booty Takes Interim Role

Publisher Midway has announced the departure of CEO David F. Zucker, with former senior VP of worldwide studios Matt Booty stepping up as interim CEO and president while the company searches for a new leader. Board chair Shari Redstone explained the move, commenting, "Dynamic new leadership is needed to bring Midway to its full potential. I believe that Midway has the resources and creative capability to once again be competitive with the best in the video game business." "The Board is confident," she added, "that a new CEO will be selected who can fully utilize the opportunities presented by this next-generation console cycle to renew Midway’s position as a major player in the video game industry.” The announcement comes following the recent resignation of Midway's executive VP, CFO, and treasurer, Thomas Powell. VP Ryan O'Desky has taken the interim role while the company finds a permanent replacement. Its senior marketing VP, Steve Allison, also departed the company at the same time as Powell, but remains in an advisory role until the end of March. Marketing VP Mona Hamilton, who was with Ubisoft until 2003, will take on responsibility for Midway's marketing and brand management activities. Said Booty, "I am excited to have the opportunity to lead our game teams and talented associates as we roll out our 2008 releases. Our plans include significant front-line releases, ambitious new intellectual properties, reinvigorated franchises with well-established fan bases, and new offerings in the casual games space." [UPDATE: Wedbush Morgan's Michael Pachter has released a research note on the change, noting: "Zucker was hired in May 2003, and since then, Midway has struggled with its game portfolio, consistently incurring significant losses in its operations. We believe that Midway is attempting to bring in new management in order to get the company back to profitability and to restore investor confidence. We note that Midway's CFO and head of sales resigned earlier this year, and believe that the company's board is intent upon upgrading key positions across the board. Although we believe Midway reached the low point in its turnaround story quite a while ago, its path to profitability remains steep. The company has made little progress in growing its revenues to a level that we believe will generate consistent profits, and its stock has continued to depreciate, losing 2/3 of its value in the last 8 months. Without better visibility into a return to profitability, we are maintaining our HOLD rating. We expect to have increased visibility by mid-2008, when new management should be in place, the company's release schedule is firmed up, and it demonstrates a plan to return to profitability."]