Midway cancels two game licenses, nearly doubles projected Q3 loss

[UPDATE] Publisher ends deal for one internally, one externally developed game based on non-owned IPs; list of suspects includes NBA Ballers, Cartoon Network; Unreal Tournament unaffected.

On Tuesday and with much fanfare, Midway Games revealed the November 16 release date for Mortal Kombat vs. DC. Yesterday, the company made a much lower-key announcement that it will cease publishing games based on two licensed intellectual properties currently in its portfolio. In a brief press release, the company said that it had "come to mutually beneficial terms with licensing partners resulting in the cancellation of future versions of related game properties and associated development expenditures."

As a result of the agreement, Midway's third-quarter fiscal losses will nearly double. Instead of the $0.37 per share loss that it forecast during its August 4 earnings call, the company now expects to lose $0.70 per share due to charges from the cancellation. That means the company's shortfall will be nearly double that of the April-June quarter, when it lost $0.38 per share, or a $34.8 million net loss.

"We made some deals back during the last console cycle, and obviously the economics have changed drastically since then," a Midway rep told GameSpot. "We take a charge now, and then we're freed up with these resources to be spent elsewhere."

More intriguing than Midway's latest financial losses is the identity of the canceled licenses. Currently, the majority of Midway games are original IPs such as Mortal Kombat, Gauntlet, Area 51, and Blitz. The Midway rep also emphasized that Stranglehold and Wheelman are "wholly owned properties," and that the latter game is still on track for an early 2009 release. Midway also said that it is still planning on publishing wrestling games bearing the TNA Impact imprint, and its deal with DC Comics remains in place.

So which IPs does that leave? The rep said that he couldn't comment on which licenses the Chicago-based company is cutting loose. However, the rep did say that Midway was opting out of publishing two licensed series: one developed internally at one of Midway's studios, the other developed externally by a third party.

Currently, only a few licenses that were around during the last console cycle are developed inside Midway--and even fewer would result in a multimillion-dollar loss. The highest profile is NBA Ballers, which launched in 2004 on the Xbox, GameCube, and PlayStation 2. The latest entry in the series, April's NBA Ballers: Chosen One, was personally fouled by critics and shunned by audiences. Domestically, the game sold less than 60,000 units on the PlayStation 3 and Xbox 360 combined as of August 31, according to the NPD Group.

When it comes to Midway-published licensed IPs developed by third parties, the list of suspects grows. The company has distributed games based on several Cartoon Network shows, including: The Grim Adventures of Billy & Mandy (developed by High Voltage Software), Ed, Edd n Eddy (developed by A2M), and Aqua Teen Hunger Force (developed by Creat Studios).

In the US, Midway also publishes the Lord of the Rings Online massively multiplayer online role-playing game, developed by Turbine Software. (European publishing duties are handled by Codemasters.) It has signed on to distribute LOTRO's forthcoming Mines of Moria expansion pack, due out November 18. However, given that Lord of the Rings Online isn't a console game and Midway didn't agree to publish it until 2006--as the console generation was transitioning--it is unclear if it falls under the rep's rubric.

Last but certainly not least are the Unreal Tournament games from Gears of War maker Epic Games. Besides Mortal Kombat, the UT games have become one of Midway's highest-profile franchises since it stole the IP from Atari in July 2004. After releasing Unreal Championship 2: The Liandri Conflict for the original Xbox in 2005, the publisher also backed Unreal Tournament 3, which shipped for the PC and PS3 last year, and the 360 this past July.

Although Unreal Tournament 3 has sold a respectable 476,000 units domestically on all platforms combined, Midway has had a rocky relationship with Epic. After a delay that pushed the PS3 UT3's release into December--past the prime holiday-shopping time of November--CEO David Zucker blamed problems with Epic's Unreal Engine 3 for delays of other Midway games, including Stranglehold and BlackSite: Area 51.

When asked point-blank if Epic was taking back the Unreal Tournament series, a Midway rep said that he could "neither confirm nor deny" anything until the company's next earnings call in "early November." However, he did take on a diplomatic air by saying, "Epic's been a great partner for us. ...And they continue to be a great partner for us with the Unreal Engine."

[UPDATE] Epic vice president Mark Rein has now confirmed to GameSpot that "Midway is still very much the publisher of Unreal Tournament 3." The two companies have straightforward publishing agreement not contingent on licensing, and are even working on a "major expansion" to UT3.

Indeed, the rep talked up the relationship between Midway and its licensing partners--even the ones with whom it no longer has an agreement. "For these particular licenses the deal that we had in place is what we've canceled," he explained. "We still have a very strong relationship with these licensing partners. One thing we're particularly proud of is keeping strong relationships with these partners."

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Discussion

147 comments
DeadManRollin
DeadManRollin

Midway is suffering from lack of creativity...it's prevalent in most of their new games. It's sad, cause they used to be a great publisher

Negemite
Negemite

So that means no more Cruis'n games on the Wii? Hey I actually like Cruis'n on the Wii, but I wish Midway Games could port The Fast and the Furious Superbikes and The Fast and the Furious Drift over to the Wii in disguse as a Cruis'n game. Midway Games is like this generation verison of Acclaim Entertainment. Well Acclaim tryed not to go bankrupt, but this is ridculous!

masterchief375
masterchief375

Mk vs. DC no Fatilities?? Is Midway trying to go bankrupt??!?!? and Why do they keep cranking out those crummy NBA Ballers games?? Let EA handle the over the top b-ball stuff (cuz at least they can do it right) but c'mon when Will I get to see the sequel to Psi Ops: The Mindgate Conspiracy?? I've been waiting on a sequel to that game since forever...

cell_100
cell_100

UT3 suck a$$ and MK is jus ruined no fatalitys jus crap man :(

Giantsfan22
Giantsfan22

In a down economy, luxuries go by the wayside.

SupahDude
SupahDude

I don't mind that the Ballers series might end. NBA Street is where it's at!!!

BioShockOwnz
BioShockOwnz

Yes, more TNA iMPACT games! Don't cancel those, Midway!

lamprey263
lamprey263

maybe they should bring back the Hitz/Blitz games before their Pro/League mutation, those were awesome

LindBergh2007
LindBergh2007

No Paul_TheGreat, this is what happens when the video game software market collapses.

Paul_TheGreat
Paul_TheGreat

This is what happens when you make sh**** games.

mangepenge
mangepenge

The First thing midway can do is get the MC rating up to mature

why9090909090
why9090909090

So if he new mortal kombat is rated "T" that means there's only brutalities? or would it be like the animalities that made mortal kombat 3 entertaining lol

Big_Evil666
Big_Evil666

as long as Mortal Kombat is not on the chopping block, i am happy! but yeah, like some of u have said, just tell us already and get the suspense over with!

krunkattack
krunkattack

yup, haven't really noticed the midway logo on my games for awhile.

Get_Shorty
Get_Shorty

Not Unreal Tournament noo!! It is a great online multiplayer hyperactive game.

woods0419
woods0419

Mortal Kombat... oh how we miss thee. What is Ed Boon doing the MK franchise?!? Look at Armageddon.. no character specific fatalities? No true character stories? Now a TEEN rating on MORTAL KOMBAT? My favorite fighting franchise has gone down the toilet thanks to that idiot Ed Boon. What happened to John Tobias? I think he was the genius behind it all, and I don't see his name in the credits anymore. The first thing Midway can do is fire Ed Boon.

necronaux
necronaux

"The rep said that he could comment on which licenses (they're) cutting loose." Why not just tell us? We're gonna find out anyway. It's not like telling us would make much difference at this point.

jer_1
jer_1

Midway pretty much sucks stones.

retrofraction12
retrofraction12

serves them right for only porting really bad games onto the wii.

Hedfix
Hedfix

Looks like the Unreal games will be being published by EA seeing as hoe Epic's been cosying up to them recently. EA have the better distribution and marketing setup.

jadefury27
jadefury27

midway was an arcade company attempting to stay relevant by doing console titles. their heart (and budget) was never really into it which is why most of their studio's are practically freelance. nothing too surprising about this.

benswinbanks
benswinbanks

@ShadowJake Midway dont make the UT series, Epic games is the developer. Changing the publisher (Going to MS as you suggested) wouldnt have any effect on its quality. @everyone else I agree MK used to be so mad, midway just dont have 'IT' anymore. perhaps they need a new original IP to get back up there

JOKEROFHEAVEN
JOKEROFHEAVEN

[This message was deleted at the request of the original poster]

ADEPTONE
ADEPTONE

Midway Sucks. They tend to rush games to meet their projected releases. The MK series died after UMK3. I still buy MK games thinking maybe one day I'd get that feeling I got when I played MK1 for the first time, but they always let me down by cheesy voice acting, horrible story line, repetitive fatalities, cheap looking generic new characters, unproportioned character models and they need to pay real martial artist's to do the motion capture instead of having one guy do everything on his own. Whatever happened to the dark, evil feeling the music had? MK is ruined and will suck even more as long as boon is in charge. I don't know how he thinks that the series is going in the right direction. I can't really think of any other games they had that I can truly say I liked other than Rampage and NBA jam.

chineolee
chineolee

Midway are carrying a lot of dead weight, but dropping unreal would be an error.

shockster4life
shockster4life

just realized i haven't bought a midway game since the N64 days

Norgavue
Norgavue

I miss the old school midway. You know the one that brought us Mortal Kombat... from the arcades to our homes. I miss that era and wish they would start putting out better games.

eyet00th
eyet00th

They should learn their lesson. Lousy games should not produce sequels, just because you spent a lot of dough to create the first game.

padrenes86
padrenes86

Midway has not been the same for a couple of years now. But, I'm glad they're not making anymore NBA games because The Ballers series is horrible.

ShadowJake
ShadowJake

Since I am an unreal tournament fan, I hope they don't drop that series. However, UT3 wasn't really THAT great so maybe it would be beneficial for the unreal tournament license to go to a different company such as Microsoft (someone mentioned that idea below). The only problem there is the PS3 people get left out. Luckily I have a 360...

atrofiado
atrofiado

i think they have good games...but things aren't going the way they expected. UT and MK were my favourite...hope those don't disappear

grassgreener12
grassgreener12

Other than Mortal Kombat, not a whole lot of what Midway makes is any good...TNA was alright, but not my kind of game. Unreal Tournament 3 was cool, but it wasn't up to the standards of its predecessors....whatever happens, happens for the best I guess

kayn83
kayn83

I wouldn't be shocked in the slightest if Midway dropped Unreal. Especially now that Epic and Microsoft are such buds, Epic could just get their games published under Microsoft (of course a PS3 version of their games probably wouldn't come out but considering the Unreal 3 engine has had problems on the console, it wouldn't be a major loss.)Besides, I think the popularity of Unreal has wanned from the glory days, while UT3 was fun it wasn't as good as its predecessors.

---Saint---
---Saint---

All good things come to an end I guess.

rddflag
rddflag

Midway, whats going on. I don't know about you guys but I'm gonna miss. N-B-A bah bah bah bah Ballers :(, and from the sounds of it we're going to lose another game company

IXIWhistIXI
IXIWhistIXI

I honestly don't see what people see in the unreal games. I loved unreal GOTY, but everything after that I cannot find the fun in. Part of it is the weapons...I hate having to aim ahead for every weapon I use except the pistol and sniper. The other part is the gameplay its self, I don't know why but it's just not fun. I hated the demo of UTIII and I'm still baffled when people say it's a great game. I honestly cannot see why people would enjoy it.

Lisandro_v22
Lisandro_v22

midway... midway... oh yeah those are the guys that made that fighting game for the PS, ain't they? EA WINS!!... FATALITY!!

maaly81
maaly81

thank GOD they cancelled nba ballers. sad for them they lost so much money but they need to start listening to gamers wants rather than old ideas for games which have ran their courses already

TGaddy314
TGaddy314

[This message was deleted at the request of a moderator or administrator]

masterhalo43
masterhalo43

i want another UT for the PS3 with SPLIT SCREEN!

JamesSoprano
JamesSoprano

i like unreal but for me it's play complete and put away to collect dust. after Unreal Tournament it just .. was always the same it just didn't feel fresh to me .. sure a new game play and that is nice but it just doesn't reel me in to play it over and over and over i didn't really bother with online mode anyways .. now i have never played Unreal Tournament 3 but i played UT2004 and 1 and 2 and it's basicly the same game .. i'm just a little tired with it sure graphics are nice but that's not what brings me too the table. UT is pretty much dead after the 1st one i mean it's the thing over and over wash rince and repeat .. i really wanna digg into UT but it's just an O.K game for me and as i said you play one you play it all not a whole lot of change. makes me not interested

otanikun
otanikun

That kinda sucks, but hey, sometimes you have to cut something off in order to make higher profits, I'm pretty sure those licenses won't stay in purgatory forever, especially Unreal Tournament. Just thank god that the new MK game isn't cancelled, I can't wait to get it pre-ordered.

jknight5422
jknight5422

You know another amazing theory that this game disproves is that going multi-platform doesn't necessarily mean higher sales. If they had focused on one platform only & spent more time on game quality, they might have had twice the number of sales.

jknight5422
jknight5422

I wonder if EA is looking at them right now...

NintendoWarrior
NintendoWarrior

thank god NBA ballers is gone, now we can have more NBA street games

Humorguy_basic
Humorguy_basic

Anyone heard of the saying 'one more nail for the coffin'?! AS sad as I am to say it, the smell of death surrounds parts of the video/PC game market at the moment. Oh, and 476,000 combined sales of UT3 are now 'respectable'? Well, the original Unreal sold over a MILLION units on PC alone! How times have changed...!!!

athomas987
athomas987

"Unreal Tournament 3 has sold a respectable 476,000 units domestically on all platforms combined" what do they expect when they just remade the game with their new engine.