Midway posts $76 million quarterly loss

By Tor Thorsen, GameSpotPosted Nov 10, 2008 4:40 pm PT

July-Sept. losses more than double on charges the Mortal Kombat maker took to cancel underperforming IPs; Redstone quits board.

Last month, Midway revised its estimated earnings for the July-September quarter, predicting its losses would almost double. Today, the company submitted its final earnings report--which revealed a shortfall even worse than last October's grim estimate.

No fatality...yet.

For the three months ended September 30, the company posted a deficit of $75.9 million, or $0.83 per share, on revenues of $36.7 million. That's more than twice the $33.5 million, or $0.37 per share, the Mortal Kombat maker bled out during the same period a year ago. The larger loss includes undisclosed charges related to the cancellation of several unnamed but underperforming games based on licensed IPs.

Matt Booty, the troubled publisher's recently installed permanent president and CEO, exuded determination in a statement. "During the quarter we executed on a series of strategic and financial moves that reinforce our commitment to developing games that meet clear profitability and scheduling goals. While some of those steps negatively impacted earnings, they were necessary to ensure we are better positioned for long-term success," he said. "More importantly, we launched three high quality games, and completed the final touches on our highly anticipated fourth quarter releases."

Critics partially agreed with Booty on the quality of the three games he referred to: TNA iMPACT!, Mortal Kombat Kollection, and the Xbox 360 edition of Unreal Tournament 3. (The latter of which is being expanded.) During the fourth quarter, the publisher has already released the semi-acclaimed Blitz: The League II and will ship its highest-profile 2008 release, Mortal Kombat vs. DC Universe, next week.

Midway believes its holiday lineup will slow its financial hemorrhaging. The company expects a per-share loss of $0.20 on $105 million in quarterly revenue. For the year, that figure increases to a whopping $1.78 per share on $210 million in revenue. If accurate, that annual per-share shortfall will be more than four times the current value of Midway stock, which ended the day at $0.43 on the NASDAQ.

One person who won't be around to see Midway's annual report is Shari Redstone. The daughter of medial mogul Sumner Redstone (who partially owns GameSpot parent CBS) resigned on Friday from her position as chairperson of the publisher's board. She was appointed to the board in 2004, after her father's company, National Amusements Inc., bought a controlling stake in the publisher.

131 Comments

  • lightning_kf

    Posted Nov 12, 2008 5:48 pm PT

    Well, sucks for TNA and the sequel that they were banking on from their first game.

    Goes to show you, don't place your eggs in one basket for ONE game.

  • tudyniuz

    Posted Nov 12, 2008 10:13 am PT

    I can't wait for MK vs DC

  • Gamingcucumber

    Posted Nov 12, 2008 6:54 am PT

    Well, Midway has everyone chance to be the company that appeals to Hardcore audiences with their often mature and brutal games. But the matter of the fact is this. It is extreamly, extreamly rare the Midway games delivers, and has been for quite some time. They need to change their gameplay if they are going to remain intact for long.

    Depending on how MK vs DC is we will see where Midway stands, and they better hope their biggest title delivers. For their sake, and MK fans such as myself.

    And the fact that they are censoring down even MK vs DC

  • Fady117

    Posted Nov 12, 2008 5:47 am PT

    looking forward to a positive change.

  • Fady117

    Posted Nov 12, 2008 5:47 am PT

    baddies happen, but goodies re-happen again...

  • sound_chaos

    Posted Nov 12, 2008 1:02 am PT

    this is sad

  • FirstDiscovery

    Posted Nov 11, 2008 11:44 pm PT

    If the Wii didnt exist, 360 and PS3 sales wouldnt have been so poor...

  • ohjtbehaaave

    Posted Nov 11, 2008 5:12 pm PT

    Blitz II is weak. Gotta get back to the arcade style of older Blitz games and NHL Hitz games if you want some profits. Blitz is no longer FUN!!!!

  • Crazylightsaber

    Posted Nov 11, 2008 4:32 pm PT

    Ouch! Damn that hurts.

  • 3rdshifter

    Posted Nov 11, 2008 4:25 pm PT

    The last Midway game i bought was Mortal Kombat Shaolin Monks. I thought that game was great! Anyone else agree?

  • theunloved

    Posted Nov 11, 2008 3:32 pm PT

    I'll be interested to see how much money they'll make off it. I'm a big fan of the series, but I'm watching this new one very carefully. I doubt it will flop, but its the last thing they have going for them right now. (I think the game will be good, but I don't like the Teen rating. Making a Mortal Kombat game teen is like taking Covenant out of Halo or removing the Lancer from Gears of War)

  • LindBergh2007

    Posted Nov 11, 2008 3:07 pm PT

    MonkeyWrench127, Because the U.S. software market is crashing and everyone else fails to see that it is.

  • paullywog

    Posted Nov 11, 2008 3:01 pm PT

    yeah midway sucks very bad and i doubt that new lame mortal combat vs dc will change anything. superhero games are always bad, and midway games are always bad, so it will be terrible.

  • _Ninja_adam_

    Posted Nov 11, 2008 2:08 pm PT

    not supprising as i can not remember a good good game released by midway, i fought they quit years ago never knew they were still around

  • EyeBleedNoSleep

    Posted Nov 11, 2008 1:44 pm PT

    Mortal Kombat Vs DC Universe has to be the one big ass bucket to bail out the water that is making the Midway Ship sink! I’m surprised that Midway didn’t go with Marvel for their first crossover. Marvel characters are maiming and killing each other all the time! A MK v. Marvel would had been an M rating for sure!

  • Sw0rDMaN

    Posted Nov 11, 2008 1:28 pm PT

    Never been a Midway fan. They never really made great quality games. And now with their Next Mk who isnt even rated Mature they wont make money on it.Im pretty sure

  • Diernes

    Posted Nov 11, 2008 1:12 pm PT

    The only thing that ever made the MK franchise stand out was the over the top gore. now thats gone ... by by midway...

    MK vs Dc is a terrible concept and they have done nothing to improve the flaws the series has had since its move to 3d

  • stvens

    Posted Nov 11, 2008 1:10 pm PT

    I wouldn't be surprised to see a larger company such as EA, Activision or Ubisoft buy Midway if it is no longer worth much - maybe simply to gain ownership of the licences which it owns.

  • Ryanj93

    Posted Nov 11, 2008 12:45 pm PT

    dam thats lots of money

  • Chief_Kuuni

    Posted Nov 11, 2008 12:41 pm PT

    well as long as the games are good, it should feel better for midway. Hope that it pics up for them, seems like most of the game makers been going threw this even though some have been buying up other companys

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