Midway buys, renames Inevitable Entertainment
The publisher trades over 200,000 shares of stock for the Area 51 developer, which will now be called Midway Studios Austin.
Before last month's Austin Games Conference, Midway Games announced that it would create a development studio in the Texas capital. Instead, it just bought one. Today, the venerable publisher announced that it had inked a deal to acquire Inevitable Entertainment, developer of the upcoming shooter Area 51. Midway also renamed Inevitable Entertainment, branding it with the innovative new handle "Midway Studios Austin."
Under the terms of the cashless transaction, Midway doled out 218,421 shares of its own stock for the privately held studio. It also gave out 152,824 restricted shares of common stock to keep top talent at Inevitable, which was founded in 2000. Daryl Allison, Steve Broumley, Russell Byrd, Pete Franco, Craig Galley, Matt Green, Cyrus Lum, Aaron Smischney, Jim Stiefelmaier, Michael Traub, and Andy Thyssen all received some of the restricted shares, which will lapse over the next three years.
The Inevitable purchase is just the latest bold business move by Midway. In July, the traditionally console-centric company shocked the industry by announcing that it would publish future installments in the Unreal series, one of the most popular PC franchises on the market. In June, former VU Games CEO Kenneth Cron was named chairman of the company's board.
Midway has also made headlines all year because Viacom president Sumner Redstone has effectively taken over the company. Besides buying over 70 percent of its stock, Redstone also placed his daughter Shari and longtime Viacom board member Joseph Califano on Midway's board.
Redstone's moves have sparked rumors that Viacom will buy Midway. In August, he filed papers with the Securities and Exchange Commission that said the following: "The management of Viacom has from time to time considered the possibility of participating more extensively in the electronic games business, possibly by acquiring a company in that industry. In this regard, Midway could be considered as a potential licensee of Viacom intellectual property, or as an acquisition candidate."
Presumably, Viacom's purchase of Midway would allow the media giant to directly publish games based on the media giant's properties--which include MTV, Nickelodeon, and Star Trek--versus licensing them out to external publishers. This would be very bad news for THQ, which publishes numerous popular Nickelodeon-inspired games, like the upcoming SpongeBob SquarePants: The Movie.
However, such a move seems to be in the offing. On October 1, when Nickelodeon Networks president Herb Scannell announced that Nickelodeon was in the final stages of licensing rights to develop video games, and that no decision had yet been made as to which video game publisher would receive the rights. The Inevitable purchase also gave the Viacom-buying-Midway conspiracy theorists ammunition, since Paramount is planning a film based on Area 51.