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.

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.

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.

54 Comments

  • _AxisofEvil_

    Posted Nov 5, 2009 6:29 am GMT

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

  • cocomacoco

    Posted Jul 29, 2009 2:23 am GMT

    MK 9 and another stranglehold

  • fowler84

    Posted Jul 20, 2009 10:52 am GMT

    i want mk 9 asap

  • Dirk13

    Posted Jul 20, 2009 4:16 am GMT

    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 .

  • ROBNER_basic

    Posted Jul 17, 2009 3:28 pm GMT

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

  • ultralesus

    Posted Jul 17, 2009 2:45 pm GMT

    And what about TNA??

    Please give me the news that someone, WB or ANYONE that the TNA Impact title has been picked up...

  • Halcalix

    Posted Jul 17, 2009 2:24 pm GMT

    Gauntlet please Warner Bros

  • CamiKitten

    Posted Jul 17, 2009 1:52 pm GMT

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

  • smurfa1

    Posted Jul 17, 2009 1:37 pm GMT

    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.

  • Arab-man666

    Posted Jul 17, 2009 12:21 pm GMT

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

  • Arab-man666

    Posted Jul 17, 2009 12:20 pm GMT

    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.

  • DastardlyD

    Posted Jul 17, 2009 10:02 am GMT

    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.

  • SoloSnakeGR

    Posted Jul 17, 2009 9:33 am GMT

    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.

  • kytomasi

    Posted Jul 17, 2009 9:05 am GMT

    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.

  • Tornado_Volcano

    Posted Jul 17, 2009 8:19 am GMT

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

  • Mordechai28

    Posted Jul 17, 2009 7:53 am GMT

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

  • StephenBassford

    Posted Jul 17, 2009 7:52 am GMT

    CRRRRRUUUUUUIIIIISSSS'NNNNNNNNNNNNNNNNNN

    USA

    YEAH!

    (insert ghetto yet sexy music)

  • FinalDuo1886

    Posted Jul 17, 2009 7:45 am GMT

    A sad day indeed!

  • sun_rider95

    Posted Jul 17, 2009 6:38 am GMT

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

  • kweeni

    Posted Jul 17, 2009 6:27 am GMT

    R.I.P Midway!

  • papaya84

    Posted Jul 17, 2009 6:23 am GMT

    New Gauntlet pls WB

  • Pete5506

    Posted Jul 17, 2009 1:04 am GMT

    I hope something good can come from this

  • lamprey263

    Posted Jul 17, 2009 12:59 am GMT

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

  • pakhair

    Posted Jul 17, 2009 12:37 am GMT

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

  • Cetanu07

    Posted Jul 16, 2009 11:32 pm GMT

    crazy

  • Rockman_00X

    Posted Jul 16, 2009 11:12 pm GMT

    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

  • Gao_Wuji

    Posted Jul 16, 2009 9:53 pm GMT

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

  • OGSwIsh17

    Posted Jul 16, 2009 9:39 pm GMT

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

  • trenno2529

    Posted Jul 16, 2009 8:18 pm GMT

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

  • tony2077ca

    Posted Jul 16, 2009 7:45 pm GMT

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

  • travisstaggs

    Posted Jul 16, 2009 7:00 pm GMT

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

  • travisstaggs

    Posted Jul 16, 2009 6:59 pm GMT

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

  • KamhouX_ShenYin

    Posted Jul 16, 2009 6:51 pm GMT

    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.

  • gtafan08

    Posted Jul 16, 2009 6:30 pm GMT

    hopefully this is vegas will come out

  • brian_13un

    Posted Jul 16, 2009 5:50 pm GMT

    Ouch

  • ItsBriskBaby

    Posted Jul 16, 2009 5:28 pm GMT

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

  • NuKkU

    Posted Jul 16, 2009 5:25 pm GMT

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

  • duke-nukem11

    Posted Jul 16, 2009 4:46 pm GMT

    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.

  • GAMESHARQ posted Jul 16, 2009 4:36 pm GMT (does not meet display criteria. sign in to show)

    GAMESHARQ

    Posted Jul 16, 2009 4:36 pm GMT (hide)

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

  • RedSteels_Fury

    Posted Jul 16, 2009 4:15 pm GMT

    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 =/

  • Terebi_chan

    Posted Jul 16, 2009 4:14 pm GMT

    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...

  • StillFreeTagger

    Posted Jul 16, 2009 3:58 pm GMT

    I'm going to miss Midway. My school's name is Midway. It kinda gave me a sense of pride.

    But as I said many times before, as long as it doesn't affect the development of future Mortal Kombat games.

  • Wings_008

    Posted Jul 16, 2009 3:54 pm GMT

    i hope WB won't ruin Mortal kombat

  • GeigerdolylWodd

    Posted Jul 16, 2009 3:52 pm GMT

    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.


    You knew they couldn't let Ed Boon go. I mean he was one of MK's co-creators they needed him to keep the franchise they just bought up to help it go in a direction that seamlessly fits in with the rest of the franchise.


    That being said whatever happened to John Tobias. I think they should reconcile and incorporate more of John's ideas into the actual fighting system.

    Is he still working for studio gigante?

  • Sins-of-Mosin

    Posted Jul 16, 2009 3:50 pm GMT

    Interested in seeing what the new owners can do.

  • TonyStewart_90

    Posted Jul 16, 2009 3:50 pm GMT

    I'm still waiting to find out what's going on with the TNA liscence.

  • Niccara

    Posted Jul 16, 2009 3:42 pm GMT

    *sigh*..

  • Sepewrath

    Posted Jul 16, 2009 3:08 pm GMT

    Well at least some of the people got to keep thier jobs, though it sucks that with Midway going under so many more people lost thier jobs.

  • beardmoen

    Posted Jul 16, 2009 3:07 pm GMT

    Still waiting for the announcement for a "Joust" movie.

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