Midway gets credit extension

By Tor Thorsen, GameSpotPosted Jan 6, 2009 2:52 pm PT

Mortal Kombat vs. DC Universe publisher now has until February 19 to pay back $75 million, in talks with remaining debt holders.

Last month, Midway Games revealed that it was carrying a crushing debt load of $240 million--$167.5 million more than the company's total assets as of September 30. Worse still, it looked as if the once-mighty Mortal Kombat publisher had only until mid-January to repay the debt. After that date, holders of $150 million in loans could demand immediate repayment from Midway--a repayment that, by its own account, the company could likely not come up with.

Apparently taking the age-old adage "You can't get blood from a stone" to heart, some of Midway's creditors are extending its payment deadline. According to an 8-K form filed with the Securities and Exchange Commission this morning, the publisher now has until February 19 to pay down $75 million of debt--or half of the $150 million due next week.

As for the other $75 million, a senior Midway rep told GameSpot that his company is in talks with the owners of the debt. "We're making progress getting our bondholders to agree," said the rep, who emphasized the debt negotiations won't affect the February 16 release of The Wheelman. "We're still on track for that," he said.

Though Midway's financial situation is grim, it's not completely hopeless. In mid-December, it took drastic steps to cut costs by laying off 25 percent of its staff, canceling "non-core" projects. The company is also expecting a boost of revenue from the highly anticipated, decently reviewed comic/fighting-game crossover Mortal Kombat vs. DC Universe, which went on sale in mid-November.

49 Comments

  • veteran_gamer

    Posted Feb 28, 2009 6:38 pm PT

    During the days of Nintendo and Sega gaming systems in the early-mid 90's, these guys were the leaders of arcade gaming. Capcom was right up there with them if not bigger.

    But in all fairness and honesty, as soon as the arcade scene died, these guys began to die off...at a slow, drawn out rate. If you don't make good games, all the money you save in forced release dates, staff, lack of experimention, engine development, etc. All you end up with, is a release date that looks nice on paper, and a product people will spit on and curse, further ruining your name as a developer/distributor, making the consumer have no faith in future titles you release. One bad egg, and it takes a long time to redeem yourself. Look at Eidos, these days, it's rule of thumb - anything they make = crap. The trailer looks good though! - It'll still be crap. Look at the features it has! - It'll still be crap.

    Resources & financial flexibility aren't the main formula for success. There has to be a hunger, a will to succeed. It has to be a happy family, a well fed and proud family. Staff has to love what they do, love the company, and truly desire to surpass the general standards in all aspects of gaming/development. You see, when the craftsmanship & passion is there, all this money crap takes care of itself, because the consumer feels the effort and dedication in the final product.

    The alternative, is crap like this, Eidos and a few other infamous names.... Games that feel FORCED, INCOMPLETE and SUB-STANDARD.

    That being said, Midway, you did give us Mortal Kombat (mainly one and two), and have left your mark in gaming history. At least you can hold that after you disband and become a forgotten entity in the quickly evolving world of gaming.

    r.i.p.

  • GriffinLord602

    Posted Jan 8, 2009 8:28 am PT

    Of course its 'on track' for The Wheelman. Because realisticly, that is the only chance they have left to get any decent amount of money. And to be honest, even that is unlikely, because The Wheelman isn't exactly the most excitingly anticipated game of 2009 :L.

  • richioso

    Posted Jan 8, 2009 2:05 am PT

    "necronaux Posted Jan 7, 2009 5:49 pm GMT Doesn't look good. Where's their government bail out? If crooked bankers and car dealers can money, why can't the good guys get something?"

    Well, to put it simply, Midway haven't made a good game in years and don't employ millions of people.

    Anyway you're probably too young to remember when Midway were the kings of development. From C64 to SNES/Megadrive.

  • Brokendemise

    Posted Jan 7, 2009 2:00 pm PT

    I agree with Retro, it's really a shame and very heartbreaking to see these companies in the downfall. They're the pioneer's of the video game age and were once some of the most respected creators in their time. The problem with Midway is that the titles and contracts it recieves, they have a tendency to screw up and they're very arcade based, which means many of the new generation of 'gamers' really aren't interested. They need to really expand out of Mortal Kombat, or they're off to the auction block...

  • picklesrocks

    Posted Jan 7, 2009 12:19 pm PT

    well their other latest games like blacksite area 51 were not as good as hoped so its a shame really

  • RetroGamer34233

    Posted Jan 7, 2009 12:08 pm PT

    It's a shame a company that has been around since pinball machines were popular is drowning in the tank. Back in the day, Midway games such as Spy Hunter, Galaga, Galaxian and Tron were pioneers of the industry. It's sad to see companies that got me into gaming way back when stumble.

  • necronaux

    Posted Jan 7, 2009 9:49 am PT

    Doesn't look good. Where's their government bail out? If crooked bankers and car dealers can money, why can't the good guys get something?

  • 24k_Solid_Gold

    Posted Jan 7, 2009 7:14 am PT

    Good Luck Midway, but I doubt they'll do it. But hey, if they do, then sweeeeet...

  • King_Jeremy_77

    Posted Jan 7, 2009 6:41 am PT

    Good luck Midway.

  • Warlypwnage

    Posted Jan 7, 2009 6:26 am PT

    minus the lack of gore, MK vs DC is a great fighting game. I hope midway makes it through this as MK has always been my favorite fighting series. gl to midway.

  • Scorpion16

    Posted Jan 7, 2009 6:23 am PT

    "I hope they make it, i kind of like their games but!!!! if they´re so desperate for money how come there's no DLC for MK V DC yet? Come on!"

    Because the game was a flop that's why. It should have never been made period. If Midway had cranked out a next gen MK game with no DC characters they may not be in this position.

  • ZhugeMarc

    Posted Jan 7, 2009 4:57 am PT

    Midway are going down, and going down hard.

  • Fat_Boy_PT

    Posted Jan 7, 2009 4:02 am PT

    I hope they make it, i kind of like their games but!!!! if they´re so desperate for money how come there's no DLC for MK V DC yet? Come on!

  • ImYourStalker

    Posted Jan 7, 2009 1:55 am PT

    I don't know much about business but what would be the point of all the businesses trying to get there money at the same time. They all know that they won't be able to get it back and I don't really see a reason for them to try unless they have come on really hard times, but then they still might not get there money back unless I'm missing something.

  • FidelSarcastro

    Posted Jan 7, 2009 12:37 am PT

    Midway who has been making so-so games for the last 10 years gets a credit extension while EGM who have been making arguably the best video games magazine is being canceled.

    There really is no justice left in this world.

  • BruceWayne0404

    Posted Jan 7, 2009 12:19 am PT

    seriously have been a member of gamespot longer than most of you have been alive. that being said midway was one of the best and innovative game developers yeah mk vs dc didnt have fatality's but instead took the gamer back to a much better combo system and breathed fresh life into the genre, look at it as a new beginning with tried and true concepts, they traded shock value for core gameplay

  • Darkon_X

    Posted Jan 6, 2009 11:54 pm PT

    When was the last time Midway released a good game? Well I still play that old school UMK on Xbox arcade that game is the ****.

  • ALLoY1717

    Posted Jan 6, 2009 11:25 pm PT

    Why don't they re-release NBA Jam for Xbox Live and PSN. There is an easy few million there surely.

  • guyvue

    Posted Jan 6, 2009 11:12 pm PT

    there are so many great ideas to make a good MK game, but instead Ed Boon and Midway sucker do the lazy way and this is what they get.
    Come on, MK suppose to be action and brutally and DC suppose to be mostly for kids/teens, why mix them?
    They should just make MK Shaolin Monks 2 would have been better.

  • brkr12002

    Posted Jan 6, 2009 10:21 pm PT

    Man I hope Wheelman does make it out. I remember when Acclaim started going under. There were several games that didn't get published for a couple years down the road.

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