Midway Q2 losses more than double to $34.8M

By Tor Thorsen, GameSpotPosted Aug 4, 2008 7:47 pm PT

Listing publisher sees spurt of red ink in April-June quarter thanks to increased development costs, more losses predicted.

Today, the once-mighty Midway Games reported another lackluster quarter. The Chicago-based publisher suffered a $34.8 million loss, or $0.38 cents per share, on net revenues of $23.4 million. The shortfall was more than twice the $14.3 million, or $0.16 per share, Midway lost on revenues of $31.8 million during the same quarter last year.

In an after-earnings report conference call, interim CFO Ryan O'Desky blamed the shortfall on increased development costs. He told analysts that Midway used $32.9 million in cash on operations during the quarter, while "cash invested in next-generation technologies and product development projects totaled approximately $26.2 million." For the entire quarter, O'Desky said "capitalized product development costs [were] approximately $73.2 million, an increase of $11.6 million from the previous quarter." While hardly welcome, the losses were less than analysts' expectations.

Another major reason for Midway's poor April-June quarter was its slim release schedule, which saw only NBA Ballers: Chosen One hit US and Canadian PlayStation 3s and Xbox 360s. The publisher also released Unreal Tournament III for the 360 in Europe, but its July North American ship date just missed the end of the quarter.

Besides the 360 UTIII, Midway plans to release its first TNA iMPACT! wrestling game for the Wii, 360, PS3, and PlayStation 2 this quarter in September. However, the company's guidance still predicts a loss per share of $0.37 on net revenues of $52 million. Also, more than four months after longtime chief David Zucker's exit, the company is still looking for a permanent CEO, president, and CFO.

64 Comments

  • bananabutt

    Posted Aug 29, 2008 6:56 pm PT

    well shyt, They wouldnt be losing so much if they just released there games, Tna has been in the works like 2 years. all that time and money wpend making a game thats gonna only sell to hardcore wrestling fans, i mean non wrestling gamers will really dig the 6 sided ring and stuff but the game doesnt offer much, peopole that arnt wrestling fans are not gonna get "into" the deep gameplay mechanics that is the game offers. I think they will lose there ASSSSSSSES on it.

  • Negemite

    Posted Aug 7, 2008 9:36 am PT

    Well if they don't do something fast they will go bankrupt. Well I always liked their Cruis'n francise and other games too liked San Francisco Rush 2049. I will only metion about these two francises.

    Well who will make the next Cruis'n game? Maybe if they went bankrupt maybe Nintendo could make a Cruis'n game since they co-owned the francise and at the time that Midway Games went bankrupt. Nintendo maybe will offically own the series and maybe make another Cruis'n game on the Wii. I can't believe that Nintendo let Midway Games to port a unrelated game over to the Wii and called it Cruis'n.

    Well for the San Francisco Rush francise? Well I don't know but Atari co-owned the series and they will be bankrupt soon. So they might give that francise away to some other company like Activision or something.

    Well I don't know about their Mortal Kombat series. They might give them away to other companies like Sega or something. We will still have Midway's Arcade Treasures but made by differnet companies like Crave Entertainment. But who knows they might make a comeback.

  • tg17

    Posted Aug 6, 2008 9:31 pm PT

    they will make a comback

  • des_kong

    Posted Aug 6, 2008 8:16 pm PT

    Hmm... sounds like goodbye Midway.

  • ParisSun

    Posted Aug 6, 2008 1:06 pm PT

    If they keep making crap games, they will sink. It's that simple.

  • GaussGoat

    Posted Aug 6, 2008 9:57 am PT

    There were people who thought that Capcom had lost their mind when they announced X-Men vs Street-Fighter, and I’m sure there were “purists” who thought it was the beginning of the end. Instead, look what happened… it took off in a big way, and spawned several games in a totally new series. The gameplay footage for MK vs DC looks freaking awesome, and I can’t wait to play it. Yes, it is not a gore-fest, but that hardly means the gameplay will be poor. I know that there are a lot of great people over there who are working their butts off to make that game awesome.

    Midway is going through a down time, but that hardly means they are out. I wish them success with their new projects.

  • El_Esbirro

    Posted Aug 6, 2008 9:33 am PT

    Mortal Kombat was good on SNES...afterwards all it's been is a waste of button smashing crap! Now they wanna do a Marvel vs capcom deal of game? MK vs DC?? WTF??? that's not original, it's boring and unprovacative to buy. TNA right now, represents the only good thing happening...and it's only because everyone is sick and tired of Smackdown vs Raw. Man, am sorry to say this but midway is currently on the way out. Rehashing games like Gauntlet and NBA Jams and all of that old school stuff, is not happening nowadays, simply because all you have to do is websurf for a videogame NES/SNES site and play till your brain drops...most importantly, all this for free! Yes, NES/SNES games when Midway made them, back in the day, were awesome. But right now, If you want to bring those back, they MUST have an interesting story with an interesting twist. So doing the same old, lame old MK, using the Marvel vs capcom mechanic....dude am sorry but that sucks!

    On top of that, No CEO or CFO to direct the ship??? still to this date?? something smells really rotten. The only way to emerge, is what everyone here says, MAKE QUALITY GAMES!

    ciao!

  • erix43

    Posted Aug 6, 2008 7:16 am PT

    Wow, the once great company that brought us Mortal Kombat is seeing loss. I feel for Midway just as much as I did for Atari. I am sure they will stick around if they beef things up a bit. Maybe they should consider making another "Suffering." Everyone forgets how great that game was on PS2 and Xbox. Ed Boon, go F*CK YOURSELF for selling out to some washed up DC comics idea. What kind of crap is that? You are seriously hurting the company nowadays. The whole MK thing got TOO CHEESY. I was a HUGE FAN, but now disappointed. Get your heads out of your A*SES and find fresh blood! Stop relying on "HAS BEENS." I LOVE MIDWAY! GET IT TOGETHER DUMMIES!! DITCH ED BOON and REVAMP THE MK SERIES-MAKE IT MORE DARK WITH BETTER STORY LINES! GO BACK TO THE BEGINNING! MK ONE! REDO IT!

  • titanviper2000

    Posted Aug 6, 2008 6:13 am PT

    Okay, what was the last great game Midway made? See my point?

  • jsmoke03

    Posted Aug 5, 2008 9:38 pm PT

    i say merge with ubisoft and 2k. now that would make for a great publishing company with lots of great studios. 2k midsoft...great name

  • Sacred-Snow

    Posted Aug 5, 2008 9:04 pm PT

    Midway has some bright looking titles, but I just don't know. We'll have to see how This is Vegas and MK turn out.

  • Sparktony

    Posted Aug 5, 2008 8:41 pm PT

    If TNA impact suck and MK vs. DC suck its over sry its the truth

  • bennae66

    Posted Aug 5, 2008 7:20 pm PT

    in days of the super nes midway was one of the kings. they are now beggars on the street with 24 re-hashings of mortal kombat. its sad for me to think that they have no relevance in my life anymore. also though, the 'casual, extreme' game market has shrunk. nba jam on snes was good but now that wont keep a gamer entertained for more than an hour. take a page from bethesda or biowares book.

  • Hokkie

    Posted Aug 5, 2008 3:50 pm PT

    Midway has gone a long ways down the drain since "Next-gen" started. They used to be a household name for fun games. But now...they just offer wrestling games? They offered new ideas with games like Blitz, SF:Rush, Rampage, Mortal Kombat, and Gauntlet. But those ideas were taken and made better by other companys, that their ideas are now just "Good". No more Gimmicks like MK vs DC. Think of some new original content guys, or just merge with EA and stop the bleeding

  • badman11226

    Posted Aug 5, 2008 3:15 pm PT

    yup cvp you are right. Midway just sucks on the next gen. They are going to keep losing until they file for bankrupt. so they better merge with another company to save some money. mk armageddon is one of the worst mk game i ever played. MK vs DC i dont know man hope its does well.

  • CVM_123

    Posted Aug 5, 2008 3:03 pm PT

    thats because they s*ck simple as that

  • digitalpro

    Posted Aug 5, 2008 3:02 pm PT

    LindBergh2007 . I was not trying to say you had anything against Midway. But I understand what you are saying. Right now I think the industry will survive the reccession. Now Midway is just a small part of the industry. Now If EA post a 35million loss then we need to worry. Now with movie downloads and other dl services out there, yu can see why DVDs sales are declining. Now some will be affected and if they put out good games and not rush them with glitches and other issues(don't they have testers for their games) If you look at the data. Game sells (games and consoles ) show that they are making money

  • toddze

    Posted Aug 5, 2008 2:59 pm PT

    Well I cant say I feel sorry for them, just because of the low game quality that they have been putting out recently

  • grigjd3

    Posted Aug 5, 2008 2:48 pm PT

    Wasn't Midway the Mortal Combat group? Doesn't seem like they've put out much of value lately.

  • crazyleftykid

    Posted Aug 5, 2008 2:41 pm PT

    well there's no other way to put this. that sucks. i think they'll make it through this, but idk, hard to tell..........

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