Midway Jettisons 'Underperforming' Licenses

Publisher Midway has resolved some of its "underperforming" licensing relationships, hoping to conserve expenditures and focus on its core properties. It's the latest of several recent, aggressive cost-cutting moves from the embattled publisher (This I
Chicago-headquartered publisher Midway (This Is Vegas) has jettisoned some of its licenses, reaching terms with its licensing partners that will allow it to cancel future related games. The company's official announcement doesn't specify which licensing deals it's gotten out of, but says the move will allow Midway to conserve development expeditures on what it calls "underperforming projects." Specifically, Midway mentions DC Comics and TNA Impact properties as "strong," suggesting that neither of those two major relationships are among the terminated. Mortal Kombat vs. DC Universe and TNA Impact!, the games developed from those licenses, respectively, are part of the publisher's Fall lineup; the former is due in November and the latter released last month. Midway will be able to end the licensing agreements without penalty, stating it ended the relationships on "mutually beneficial terms." Nonetheless, it expects a third quarter net loss of 70 cents per share as a result of the pipeline cancellations, an increase in loss over its previous anticipated 40 cents per share. Matt Booty, who continues as "interim" president and CEO despite taking the role about seven months ago, says the move is a "positive step" that will allow Midway to "focus on [its] core properties." Last month, Midway moved to shore up its inventory and manufacturing funding by selling $40 million in accounts receivables to National Amusements Inc, which is directed by Midway Board chair Shari Redstone. In its second fiscal quarter, Midway reported a $34.8 million net loss, more than doubling its losses year over year. It also saw a 26 percent drop in revenue year-over-year to $23.4 million. Just after that, it laid off between 90 and 130 employees at its Austin studio -- 10 percent of its workforce -- as part of a cost reduction plan, also writing down $10 million in development expenses for a canceled project. "Our fall lineup and strong pipeline of games that tie in to market-leading licenses like DC Comics and TNA Wrestling underscore our strategy of aligning with consumer and entertainment properties that can drive a solid gaming experience," Booty says.

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