Midway posts $76 million quarterly loss

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 GMT

    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 GMT

    I can't wait for MK vs DC

  • Gamingcucumber

    Posted Nov 12, 2008 6:54 am GMT

    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 GMT

    looking forward to a positive change.

  • Fady117

    Posted Nov 12, 2008 5:47 am GMT

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

  • sound_chaos

    Posted Nov 12, 2008 1:02 am GMT

    this is sad

  • FirstDiscovery

    Posted Nov 11, 2008 11:44 pm GMT

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

  • ohjtbehaaave

    Posted Nov 11, 2008 5:12 pm GMT

    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 GMT

    Ouch! Damn that hurts.

  • 3rdshifter

    Posted Nov 11, 2008 4:25 pm GMT

    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 GMT

    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 GMT

    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 GMT

    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 GMT

    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 GMT

    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 GMT

    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 GMT

    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 GMT

    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 GMT

    dam thats lots of money

  • Chief_Kuuni

    Posted Nov 11, 2008 12:41 pm GMT

    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

  • otanikun

    Posted Nov 11, 2008 11:26 am GMT

    Bummer, but hardly doubt that such a wonderful company like Midway is going to disappear anytime in the near future; cute comment bigdawg, but that's unfounded information.
    I'm pretty confident that if they've risen from a fall in the past, they can pull it off again.

  • Noclippin

    Posted Nov 11, 2008 11:03 am GMT

    I would not mind if Midway left the market, i've never really enjoyed any of their games.

  • BigDawgSteve420

    Posted Nov 11, 2008 10:32 am GMT

    So basically if MK vs. DC flops, Midway is probably done. And with a T rating and lack of old school fatalities, the old school MK fans that would have been interested and probably made this game a hit, probably won't buy(myself included). RIP Midway.

  • MonkeyWrench127

    Posted Nov 11, 2008 9:57 am GMT

    You see what I don't get is how these big publishers post losses, when gaming is making huge profits as a whole and is fast becoming the most profitable form of entertainment???

  • ratm247

    Posted Nov 11, 2008 9:33 am GMT

    tna impact quality? yeah right. i have yet to see any type of media that makes me think mk vs. dc is going to be anything but horrible. the fatalities and brutalities look PG, where is the gore that this franchise helped pave the way for almost 20 years ago? superman pounding someone into the ground? thats looney tunes not mortal kombat.

  • darkspirit138

    Posted Nov 11, 2008 9:26 am GMT

    I think Mortal Kombat should stay an adult game, coz thats what makes it so good. Not a lot of teens who havent played the Mortal Kombat franchise will play MK vs DC

    MK forever!...or not.

  • darkspirit138

    Posted Nov 11, 2008 9:25 am GMT

    Midway should think about making some sort of game similar to Mortal Kombat's Armageddon Konquest, but with online play and co-op play. This would be really cool, since there aren't very many co-op games on the PS3. Maybe they should also make a game like Tekken 5, that has all the other Tekken's (just not 4) into the game. They should also introduce a giant Motor Kombat type game.

  • HalfBak3dM0nkey

    Posted Nov 11, 2008 9:05 am GMT

    Don't get me wrong, I loved my NFL Blitz for arcade and N64, but these days it isn't about coming out best like it was for 90's arcade. This is the new age of innovation and perfection in games. Everyone could agree that the ideal time period for Midway was the birth of the Playstation and also N64.

  • TheArcade

    Posted Nov 11, 2008 9:04 am GMT

    Okay, if Midway wants to bounce back from this then they will bring Mortal Kombat Trilogy to console with online play. That should put some cash in their pockets.

    Also I hope Rare follows through with their plans to make another Killer Instinct and the rumor isn't bogus.

  • HalfBak3dM0nkey

    Posted Nov 11, 2008 9:01 am GMT

    Just finish the job.
    Second rate games are never enough to sustain a company, they lost absolutely all innovation and ultimately when you do that and don't come out with any good ideas and push out games like Blitz II (a dead football idea) and MK VS DCU expect to see the company drop.
    Same fate came to Acclaim and like someone said on here earlier, Interplay.

  • RockmanSRD

    Posted Nov 11, 2008 9:01 am GMT

    -$76 million? I'm not surprised... Coming up with games like MK vs. DC will do that too a company.

  • icym

    Posted Nov 11, 2008 8:40 am GMT

    They were on the right track sometime ago when they started to develop games outside of their usual stable, like Psi-Ops. Maybe it didn't shake the world, but its the right thinking. After all, has re-re-releasing the same old with new polish been working? And don't say its the bad economy, losses from Midway has been consistent since the 90s

  • p0rkp1e74

    Posted Nov 11, 2008 8:21 am GMT

    not sure if even Mortal Kombat vs, DC will actually slow the hemorrhaging or just prolong the inevitable.....Midway has to start pumping out new and respectable IP's.

  • DeadlyOnez

    Posted Nov 11, 2008 8:11 am GMT

    yes it Rare that created and published Killer Instinct. (which I hears there making a new gen game)

    @mfdoomed That icon pic is giving the creeps! I used to have nightmare of that damn clown.

  • djmusmc

    Posted Nov 11, 2008 8:08 am GMT

    Your right MFDOOMED. It was created by Rare and published by Midway.

  • MFDOOMED

    Posted Nov 11, 2008 8:04 am GMT

    Rare did Killer Instinct, I thought. Could be wrong tho.

  • djmusmc

    Posted Nov 11, 2008 8:03 am GMT

    Midway wouldn't have this problem if they would have kept producing more killer Instinct games. That game was tight.

  • spydersvenom7

    Posted Nov 11, 2008 8:00 am GMT

    DJ, you can't just close a company. As a corporate employee who works in Chicago (where Midway is based), closing the company would ruin lives in a company, that while I admit has had some big flops, still has some strong life in certain IPs. There are hundreds of millions of dollars and families on the line, you can't just close up shop unless you're completely down (and they aren't yet). Besides, Midway closes and you're closer to that reality where Activision and EA are all that is left.

  • MFDOOMED

    Posted Nov 11, 2008 7:59 am GMT

    I second that DJMist.

  • DJMist

    Posted Nov 11, 2008 7:51 am GMT

    Close the damn company already!

  • DeadlyOnez

    Posted Nov 11, 2008 7:49 am GMT

    o and one last thing the Fatalities in MK VS DC Suck!

    they water them down to get a T rating.

  • firehawk998

    Posted Nov 11, 2008 7:45 am GMT

    Let me get this straight in MK VS DC fatalities and whatnot are there but they will not show it. Midway my question to you is why the hell put fatalities in MK VS DC if you are not going to show it!!!!!!!!!. No wonder you guys a taking a loss.

  • DeadlyOnez

    Posted Nov 11, 2008 7:26 am GMT

    I think these publishers are taking any game into consideration for the right amount of money.

    Sellouts. ok I'm done I promise.

  • DeadlyOnez

    Posted Nov 11, 2008 7:24 am GMT

    What has Koonami done since making MGS4?

    I heard Silent hill HC was a pretty good game but whatelse?

    They made that Hellboy game which blow chunks

  • DeadlyOnez

    Posted Nov 11, 2008 7:20 am GMT

    I hope other game publishers are learning from these mistakes. you can't just try to sell use crap and tell us its gold. Bungie we are looking at you next! I love halo but I'm tired of the same old same old and Blizzard you to, yea we like warcraft and starcraft now and diablo 2 look ok but one day ONE DAY! BAM! RIGHT IN THE KISSA!

  • Autolycus

    Posted Nov 11, 2008 6:48 am GMT

    Not hard to figure out.... what have they released in the past year that is news worthy? Exactly. The only thing they have going for them is MK vs DC, and I am sure they'll butcher that somehow too...

  • Mr_Unko

    Posted Nov 11, 2008 6:47 am GMT

    if midway does end up getting a fatality, i really hope another publisher like capcom or something picks up the MK series =P

  • MFDOOMED

    Posted Nov 11, 2008 6:42 am GMT

    I didnt rate your comment and No I dont care about Midway.

  • GeigerdolylWodd

    Posted Nov 11, 2008 6:35 am GMT

    Well if its a dumb idea why dont you suggest something its like you dont even care.

  • MFDOOMED

    Posted Nov 11, 2008 6:34 am GMT

    Midway SUX!

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