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Midway mulling Mortal Kombat sale

By Tor Thorsen, GameSpotPosted Mar 2, 2009 2:31 pm PT

Chicago-based publisher's employee-incentive plan lists selling off flagship fighting IP as "milestone"; reps downplay option as "just one possible scenario."

Already beleaguered by a Chapter 11 bankruptcy filing stemming from $240 million in debt, Midway Games workers got no rest over the weekend. That's when a February 25 post on the bankruptcy blog NetDockets.com received wide attention for listing three milestones of the Chicago-based publisher's KEIP--key employee incentive plan--to retain 29 workers.

The three milestones, which were authenticated to GameSpot by Midway reps, begin with a $497,500 KEIP bonus for "Entry into a publishing/distribution agreement for Midway's new 'Wheelman' game performance by Midway entitling it to gross proceeds of $6 million under the agreement by March 1, 2009, and actual receipt of those proceeds." The company sealed exactly such a deal last month with Ubisoft, which will distribute and market the Wheelman in North America on March 24 and Europe on March 27.

The next milestone can be reached by one of two ways: Either "submission by Midway of a plan of reorganization to continue as a going concern" or "execution of an asset-purchase agreement for the sale of Midway's Mortal Kombat franchise assets." The third milestone will be similarly achieved by either "confirmation of a plan of reorganization or liquidation" or "closing of a sale of Midway's Mortal Kombat franchise assets." The two milestones will pay out collective bonuses of $1,292,500 and $1,965,000, respectively.

Given the use of the term "bonus" and current anti-executive-payout furor gripping the nation, many gamers saw the move as Midway executives lining their pockets by auctioning off a beloved franchise. Representatives for the company were adamant that this was not the case.

"The 29 employees do include some corporate officers, but there are other employees from all levels and all departments-including finance, IT, legal, marketing--from all over the place." a rep told GameSpot. "These are all people whose workloads have increased since the bankruptcy, and this is to incentivize them."

The rep also confirmed that two separate KEIP plans were submitted to retain Midway's remaining game developers and the Mortal Kombat design team in particular. Both groups were hit by layoffs last December, when Midway culled 25 percent of its workforce.

As for the sale of the Mortal Kombat intellectual property, the Midway rep said that it was one of several scenarios laid out as part of a plan to submit to the company's creditors under the rules of US bankruptcy law.

"That document is not intended to reflect any plan of record for the company," he said. "It's to ask the creditors committee to approve a KEIP plan. ... It's intended to cover all the bases if there's the possibility of an asset sale. Either a [Mortal Kombat] sale or reorganization contingency would be considered success metrics for hitting those milestones."

The Midway rep also stressed that the KEIP plan is "just a first draft" and could go through several revisions before being approved. He also said that the company's board wants "very much" to keep the company together, and "keep what makes Midway at Midway." Finally, he added, "It's management's responsibility to get the maximum value for the assets of the company. ... But it's our goal to keep the company together as a whole rather than sell it off piece by piece, because there's greater value there."

229 Comments

  • Neravir

    Posted Mar 24, 2009 2:50 pm PT

    Not good...what about Psi-Ops's sequel?..and MK...*sigh*if only Tobias returned...

  • pilot_riaz

    Posted Mar 11, 2009 6:29 am PT

    Capcom make brilliant fighting games and are very experienced in this field. EA best known for sports games, would you see Mortal Kombat improve by EA? Certainly not!

  • pilot_riaz

    Posted Mar 11, 2009 6:27 am PT

    Why does Capcom not buy Mortal Kombat franchise? They would make thehe game so much better.

  • tizzomr

    Posted Mar 9, 2009 12:52 pm PT

    They need to bring back old school NBA JAM 2 on 2 like hangtime, with new players, and put it on the arcade. Or sell the rights to somebody who already has a license. I KNOw it would sell like hot cakes, and would buy it myself the first day it came out. don't let EA have it though they'll hustle like with that NHL game, which BTW you should read reviews of before you buy.

  • roflmuffins8

    Posted Mar 6, 2009 3:52 pm PT

    Capcom doesn't need another fighting series. They already have Street Fighter as it is. Dang economy, it had to turn a great franchise into a fatality.

  • -Dark_Palladin-

    Posted Mar 6, 2009 11:01 am PT

    @ NolifeGamin

    Absoulutly not. I absoulutly hate Crapcom, and I would die if it even tried to ruin Mortal Kombat. (See my reviews for more info)

  • steveguttenberg

    Posted Mar 5, 2009 7:34 am PT

    Capcom should buy Mortal Kombat. Imagine Mortal Kombat in the hands of competent developers... Oh, also Mortal Kombat vs Street Fighter.

  • SmashingX

    Posted Mar 4, 2009 9:41 pm PT

    well i thought it was over when they decided to make MK vs DC =)

  • Downloadpilot

    Posted Mar 4, 2009 6:56 pm PT

    Dang

  • eddievh_5150

    Posted Mar 4, 2009 5:42 pm PT

    I agree with crazy_guns. That would be orgasmic.

  • Crazy_Guns

    Posted Mar 4, 2009 2:42 pm PT

    @vengeance00
    I agree, I still play UMK3 online on Xbox Live Arcade on a *very* regular basis, it's loads of fun and I still get more enjoyment out of playing it than I do some of my newer games, even though it's like 13 years old. It was a great game and I think Mortal Kombat was in its prime in the 2D format and started to lose some of its heart and soul when it transitioned to 3D, not to say it became bad but it just didn't feel the same. All my humble opinion of course, but that's how I feel as well.

    I think it would be great if they could release a "Mortal Kombat: Komplete Kollection" or something like that before they throw it all away. Include every MK game ever made on a disc optimized to run on modern consoles (like UMK3 on XBLA) and add online play. I'd buy it and I'm sure a lot of people would. Just make sure they're all arcade versions and not home versions, the arcade ones were better (at least in the 2D era). This may be an unrealistic thing to ask for at this point but it'd be one heck of a going away gift and it's nice to dream. MK is still my favorite fighting series.

  • spartant15

    Posted Mar 4, 2009 1:22 pm PT

    Dang. Midway needs a franchise other then Mortal Kombat.

  • KoruKinshi

    Posted Mar 4, 2009 10:05 am PT

    That is a damn shame...

  • vengeance00

    Posted Mar 4, 2009 6:46 am PT

    what people in the industry seem to not understand is when you build a game you build for either 2d or 3d. like mortal kombat, sonic the hedgehog went down the toilet when he stepped into 3d and if a game like say tekken went into 2d it would most likely suck. games developers should keep games in their 'birth place' and not rush them into 3d because everyone else is doing it.

  • lamprey263

    Posted Mar 4, 2009 6:19 am PT

    I personally would have liked to have seen a Mortal Kombat vs Street Fighter game years back, maybe Capcom would like to buy the IP, I think they could do something interesting with it.

  • batsy4life

    Posted Mar 3, 2009 8:42 pm PT

    I wonder who's next?

  • raghraghragh

    Posted Mar 3, 2009 7:55 pm PT

    If they got rid of Mortal Kombat, honestly, what else do Midway have? Not a whole bloody lot, that's what.

  • tawagivercetti

    Posted Mar 3, 2009 7:43 pm PT

    I don't care about MK, whats happening to the rights to NBA JAM ?
    I'd buy them and release NBA JAM on xbox live arcade/psn with all new players similar to NHL 3on3!

  • giort08

    Posted Mar 3, 2009 5:06 pm PT

    I personally am glad that Midway is going down the toilet. I do feel for all those underlings that have been royally screwed over, I really do, but Midway has had this coming. And after reading this travesty, it couldn't happen any faster.

  • IsmirZone

    Posted Mar 3, 2009 4:23 pm PT

    I rather Ed Bood to kill Mortal Kombat project entirely then any other developer getting their hands on it.

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