Midway's Chicago HQ closing, final buyout price $49 million

Sixty employees at publisher's offices laid off, but 100-plus Mortal Kombat dev team rehired by Warner Bros.; $69 million to $76 million in assets and development costs written off.

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Last Friday, the majority of Midway Games' assets were bought by Warner Bros., parent company of rising publisher Warner Bros. Interactive Entertainment. As a result, employees at Midway's San Diego studio were informed that the facility would be shut down by August 31 unless a buyer could be found. Then, earlier this week, the publisher's Newcastle, UK, studio, developer of the stillborn Necessary Force, shut its doors--eliminating 25 percent of the publisher's payroll.

No Caption Provided

Today, as rumored, Midway announced that all 60 workers at its Chicago headquarters would be let go by September 13. The layoffs will not affect any members of Midway's Chicago development studio, which is in a different building. According to a Midway rep, that operation was bought outright--facilities included--by Warner Bros., which has retained all 100-odd staffers at the Mortal Kombat-focused shop. That figure includes Ed Boon, who, according to a recent Twitter post, is hard at work on a back-to-ultraviolent-basics Mortal Kombat 9.

A form filed with the Securities and Exchange Commission outlined the scope of the Chicago HQ layoffs, which account for about 20 percent of the remaining global workforce of Midway, which still exists as a company. The form also revealed that, as a result of last week's sale, said company will be writing off $69 million to $76 million in debt: $25 million to $30 million of development costs and $3 million to $5 million of fixed assets--aka items like buildings, which can't be easily liquidated. Midway is also writing down $41 million of impaired goodwill, or the value of assets Midway held that were reduced or eliminated as a result of the Warner Bros. buyout.

The good news for Midway--and its creditors--is that the final amount paid to that company was higher than the $33 million figure announced in May. The SEC revealed that the aggregate gross purchase price was actually $49 million, with the increase due to "considerations such as inventory and accounts receivable," according to the rep.

For its $49 million, Warner Bros. now owns virtually all of Midway's IP, including Mortal Kombat, Wheelman, Gauntlet, Joust, Spy Hunter, and Area 51, among others. Midway's Seattle development studio, which is still working on This Is Vegas, was also acquired. Whether the Sin City bender simulator is ever published "is now Warner Bros.' decision," said the spokesperson.

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Avatar image for Nefercare
Nefercare

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Maybe Warner Bros, may bring an original Mortal Kombat like the first installment, but not with rendered characters that looks like clay, I would love to see the original MK like characters that were actual Human actors that made fights and fatalities so realistic, I remember when a friend back in the 90´s told about this game and I ran to the Arcade to watch these revolutionary game, first fatality that I saw was Scorpion´s and until today he had been my favorite character. With this I´m trying to say that if Ed Boon by himself did a wonderful job, with WB support he will make greater things! Chance is always good...

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lilflex1

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@SaKHeD i agree to what you said. and you said you had a list of games let me just throw crazie taxi out there

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shakensparco

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This recession is killing small companies and forcing them into the arms of the monopolies like Warner Bros. and EA.

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SaKHeD

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MK 9 you say, WELL I welcome that S&^! with open arms ohh man. i only hope based on what I read in the article above, that MK returns to it's old school roots, ED BOON you know what I'm talking about, mk trilogy, mix with a bit of MK deadly alliance 3D action. and you got yourself a nice formula called MK:9.... although wishful thinking. as for other titles like this is vegas, gaunlet, (MAYBE stranglehold 2, or a good blitz game maybe, crusin usa/world, san franciso rush, damn i got a huge list dude. I just hope some of these come out in the future, and aren't complete wastes of time to play.... even though i'll probably play them if they do. R.I.P. Midway, and hhello OwnD midway lol i'm done.

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grasshopper6

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I hope this is vegas still comes out

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Kainkillers

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noooooooooooo

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Kainkillers

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Damn, That might was hard to Ed Boon and John Tobias :(

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I_GOT_YO_ASS

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well i just hope they dont Fu k this game up this time putting those lame as.s fatalities in there and lame characters...heres a tip put aleast 50 or so characters that u can use on the game and go all out with the fatalites dont be a wimp.....if i had the money to buy out the company i would and show yall how its done....

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_AxisofEvil_

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mk9 wow i never thought the day would come. FLAWLESS VICTORY for us ALL!!!!

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cocomacoco

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MK 9 and another stranglehold

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fowler84

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i want mk 9 asap

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Spincut

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Isn't the Chicago HQ their main HQ? Besides, I already though they went under in that sense. Oh well, one more place that I can't seek gainful employment :( .

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ROBNER_basic

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bring back the rush series!! nd not that crappy LA one either

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ultralesus

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And what about TNA?? Please give me the news that someone, WB or ANYONE that the TNA Impact title has been picked up... :(

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Halcalix

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Gauntlet please Warner Bros:D

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CamiKitten

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Hmmm, not sure how I feel about this. Mebbie WB should bring back Gauntlet :D!

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smurfa1

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Not sure where I stand. There could be both positive and negative aspects coming out of this. When many of the smaller publishers are bought by the bigger ones there is a risk (due to large corps equals, mostly, much money) that the market will be flooded by mediocre sequels of recently developed games that became successes. As long as a series will sell they do not have to worry much of the quality. Smaller publishers and developers must, in most cases, be sure what they are developing is a product of high quality since they have much more to loose if the game do not sell. Larger companies can afford low sell rates better than small ones. On the other hand, a larger publisher is able to invest more money in a game than a small publisher would be able to. In this way, they may be able to assure the developer can afford to create a quality game. EA is a good example. I was worried that they would flood the market with low quality Battlefield games when they acquired DICE. Fortunately I was wrong, Mirror's Edge and Bad Company proves that even a mass publisher like EA are willing to publish quality games rather than a high quantity of mediocre games. So as long as WB do not interfere with Midway's developing parts and only support them financially, I think this could end well for Midway as a developer.

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Arab-man666

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Oh wait. The devopment studio is still going to be open? That's a relief.

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Arab-man666

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Wow, a loss for us in Chicago. I'm headed down to the midway HQ to pay my respects before the close. That company had some of the industry's best talent... too bad the resources kept getting more and more scarce. I remember going down there when Mortal Kombat Deadly alliance was being developed, and seeing all the posters and adds... good times.

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DastardlyD

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Gao_Wuji: "I'm glad their Chicago studio is staying open. There aren't enough game studios in the midwest." I didn't even know they were that close. I could have swore that almost all the game studios were in California or New York. Too bad, I would have tried to pay them a visit had I knew they were 5 hrs. away.

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SoloSnakeGR

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First post in gamespot....Anyway I think it's a pity because there have been many games from this company I enjoyed.Well except for...Wheelman! I hope something good comes out of it though.

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kytomasi

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Its sad, after i got my degree in Animation and 3D modeling, one of the 1st places i applied for was midway HQ. my father use to work for at this same location, making pong consoles.

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Tornado_Volcano

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I'm afraid that Midway won't be the only one...

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Mordechai28

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I feel sorry for the studios that were not included in the deal.

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StephenBassford

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CRRRRRUUUUUUIIIIISSSS'NNNNNNNNNNNNNNNNNN USA YEAH! (insert ghetto yet sexy music)

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FinalDuo1886

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A sad day indeed!

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sun_rider95

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I feel sorry for midway......or not

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kweeni

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R.I.P Midway! :(

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papaya84

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New Gauntlet pls WB

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Pete5506

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I hope something good can come from this

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lamprey263

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lamprey263  Online

well, MS would be stupid not to, that's a really cheap buy for a larger company

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pakhair

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I hope quality of midway games improve now cause WB is a rich company. So we can expect more budget for games.........

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Cetanu07

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crazy

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Rockman_00X

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I remember going through elementary school and jr. high with Mortal Kombat. I remember saving up change so I could take the bus to the arcade at the strip mall or by the movie theater just to play. Now those were the days before reality and responsibility set in. Be that as it may, Midway was a fairly decent company. MK being, arguably, it's biggest IP that made it buckets of money, dwindled after MK3. MK v DC was such a let down due the "vaginafication" of WB. You know Marvel didn't complain when you could use Roll or Amingo to kick the @#%$ out of a Sentinel.But I digress. Midway will be missed as it served me a means of forgetting about my problems until my quarters ran out. R.I.P. Midway 1958 - 2009

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Gao_Wuji

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I'm glad their Chicago studio is staying open. There aren't enough game studios in the midwest.

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OGSwIsh17

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I just hope we get good games from WB... too bad Midway is gone now :(

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trenno2529

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damn. i doubt the quality of the games will slip though. hope, actually.

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tony2077ca

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hmm what was the last game i got from them hmm i can't recall

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travisstaggs

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But then again Mortal Kombat hasn't been that good for awhile.

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travisstaggs

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WB will ruin Mortal Kombat, or I think they will.

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KamhouX_ShenYin

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Alright, I personally think that while it's good news that WB bought what was left of Midway, it may not change much. They have a strong recent history of bad decision making. Focusing on a new MK title when the franchise's lack of quality cannot garner sales won't help the problem any. It's still the same design lead at the helm, so what's the difference really? If they keep that up, they may very well end up right back where they started. Broke.

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gtafan08

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hopefully this is vegas will come out

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brian_13un

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Ouch

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ItsBriskBaby

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Oh great! Now I'm gonna see a MK game vs Looney Toons.

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NuKkU

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man miway was a good company R.I.P Midway :(

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duke-nukem11

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midway has been a icon in videogaming since the late 80's and has some real classic games under its belt. but in this day and age a publisher/dev live and die by there games. coz there so expensive to make and market. one slip and its goodnight.

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GAMESHARQ

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What does this have anything to do with any of the games I subscribed to updates for?

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RedSteels_Fury

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Hopefully whatever ends up being Midway in the future picks up again, as I am living outside of Chicago and was kinda hoping i could get a job close to home after im done with college =/

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Terebi_chan

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Am I the only one who's noticed something regarding the Atari Games (i.e., post 1984) catalog (which Midway owns). With Midway's sale to WB, this means that the Atari Games catalog will be returning to Warner Bros (who once owned Atari Games itself). Still, I do wonder of WB plans to revive that Spy Hunter movie project that never got completed...

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