Midway Games, Inc. is an American video game publisher. Following a bankruptcy filing in 2009, it is no longer active and is in the process of liquidating all of its assets. Midway's titles included Mortal Kombat, Ms.Pac-Man, Spy Hunter, Tron, Rampage and NBA Jam. Midway also acquired the rights to video games that were originally developed by Williams Electronics and Atari Games, such as Defender, Joust, Robotron 2084, Gauntlet and the Rush series.
The company's predecessor was founded in 1958 as Midway Manufacturing, an amusement game manufacturer. In 1973 it moved into the interactive entertainment industry, developing and publishing arcade video games. The company scored its first hit with the U.S. distribution of Space Invaders in 1978. Midway was purchased and re-incorporated in 1988 by WMS Industries Inc. After many years as a leader in the arcade segment, Midway moved into the growing home video game market beginning in 1996, the same year that it made its initial public offering of stock. In 1998, WMS spun off its remaining shares of Midway. Midway was ranked as the fourth largest-selling video game publisher in 2000.
After 2000, Midway continued to develop and publish video games for home and handheld video game machines, but it experienced large annual net losses and engaged in a series of stock and debt offerings and other financings and borrowings. Sumner Redstone, the head of Viacom/CBS Corporation, increased his stake in Midway from about 15%, in 1998, to about 87% by the end of 2007. In December 2008, Redstone sold all his stock and $70 million of Midway debt to Mark Thomas, a private investor, for $100,000.
In February 2009, Midway Games filed in Delaware for bankruptcy. Warner Bros. purchased most of Midway's assets (including Mortal Kombat), and Midway settled with Mark Thomas to relinquish his Midway stock and debt. The U.S. District Court in Chicago dismissed a lawsuit alleging that former officers of Midway misled shareholders while selling their own stock. In 2010, the bankruptcy court dismissed claims against Redstone concerning his sale of the company to Thomas and approved Midway's plan of liquidation. The company terminated the public registration of its securities in June 2010.

Midway Games Inc. (OTC Pink Sheets: MWYGQ), headquartered in Chicago, Illinois, with offices throughout the world, is a leading developer and publisher of interactive entertainment software for major videogame systems and personal computers. More information about Midway and its products

Midway Games, Inc., is one of the world's leading producers of video games. The company designs, publishes, and markets games for coin-operated arcade machines as well as for home video game consoles and personal computers. Midway has published or distributed some of the most popular games in the industry, including the "Mortal Kombat" series, "Cruisin' USA," "NBA Jam," "Defender," and "PacMan." The "Mortal Kombat" line alone has sold more than 14 million units. It has brought Midway over $1 billion and at the beginning of 1998 accounted for more than 20 percent of the company's annual revenue. In the early years of its development Midway produced games exclusively for arcades and was the number one company in the coin-op market. Through its subsidiary Midway Home Entertainment, however, it has moved aggressively into the home market. Midway makes its home games in formats compatible for all the leading game models, including the popular Nintendo 64, Sony PlayStation, and personal computers.

In 1996, WMS made a public offering of Midway stock and, in 1998, WMS spun off its remaining 86.8% interest in Midway to the WMS shareholders, making Midway an independent entity for the first time in almost 30 years.Midway kept Atari Games as a wholly owned subsidiary as part of this spin-off. Midway retained or shared some of the WMS executive staff and used some common facilities with WMS for a few more years. Over several years, Midway gradually terminated all material agreements and executive overlap with WMS and had a declining number of common members of its Board of Directors, until it shared only one with its former parent company.
By 1999, Midway left the pinball industry (it had earlier transferred most of its pinball assets to WMS in exchange for video game assets of WMS) to concentrate on video games. In January 2000, Midway changed the name of its "Atari Games" subsidiary to Midway Games West to avoid confusion with the other Atari company, then owned by Hasbro Interactive. In June 2001, Midway closed its arcade division due to financial losses. In February 2003, Midway closed Midway Games West, ending what was left of the original Atari. After losing money each year since 2000, Midway's losses accelerated in 2003, as it lost $115 million on sales of about $93 million. Despite these losses, the company was able to finance its business with stock and debt offerings and various credit arrangements. In 2003, Sumner Redstone, a significant minority shareholder since the company's spinoff, began to increase his stake in the company and soon owned 80% of the stock.
In 2004, in an effort to expand its market share, Midway began a purchasing spree of independent video game development studios to strengthen its product development teams .In April 2004, Midway acquired Surreal Software of Seattle, Washington. In October 2004, it acquired Inevitable Entertainment of Austin, Texas (which became Midway Austin). In December 2004, it acquired Paradox Development of Moorpark, California. On August 4, 2005, Midway acquired privately-held Australian developer Ratbag Games. The studio was renamed Midway Studios—Australia. Four months later, on December 13, Midway announced to its employees there that it was shutting the studio down, leaving its employees based at that studio without a job. Two days later, on December 15, the studio was closed and their Adelaide premises emptied. During 2004 and 2005, Midway lost $20 million on sales of $162 million, and $112 million on sales of $150 million, respectively.Redstone voted his shares to elect his daughter Shari Redstone to Midway's board of directors and later as the chair of the board.
Midway was ranked as the #4 video game publisher by sales in 2000. It was ranked as the #19 video game publisher in 2005 and had fallen to #20 in 2006, according to the magazine Game Developer.

In 1994 Midway licensed multimedia rights to "Mortal Kombat" to Threshold Entertainment, which turned the license into a property worth $3 billion. According to Threshold CEO Larry Kasanoff, "Mortal Kombat" has become the fifth-largest entertainment franchise in the world, ranking just after "Batman" and "Star Trek." In all there are over 100 licensed "Mortal Kombat" products on the market. Threshold released two "Mortal Kombat" movies, the first of which made $100 million worldwide in 1995, the second of which was the country's number one movie the weekend it opened in November 1997. Besides the movies, Threshold produced an animated TV series, a "Mortal Kombat" stage show at Radio city Music Hall, a "Mortal Kombat" CD-ROM, a "Home Mortal Kombat Special" on DIRECT TV, three soundtrack albums, one of which went platinum (one million copies sold), a live action TV show, and one of the Internet's most popular websites, mortalkombat.com.
In October 1997 the arcade version of "Mortal Kombat 4" was released. The game, which the company dubbed "the final version" in press releases, was the first to utilize Midway's new Zeus Chip. The chip was the key to a powerful new graphic system that enabled the game to process visual data about ten times faster than other systems, increasing the levels of realism proportionately. In 1998 Midway began pushing the Nintendo 64 version of "Mortal Kombat 4" more aggressively than ever, weeks before the game was due to be released. A multi-million dollar, music video-style television ad campaign coincided with the airing of the first "Mortal Kombat" movie on TBS, a film shown five times during May 1998. Midway also lowered the suggested retail price of "Mortal Kombat" 4 from $59.95 to $49.95. The game itself was scheduled to be released on June 29.
At the end of 1997, Midway announced that revenues had risen 13 percent to $73.7 million during its July-September 1997 quarter. During the same period, however, home game revenues fell from $47.6 million to $40.1 million, largely because the company had postponed the release of "Top Gear Rally" and "Mace: The Dark Age" until the end of September. Nonetheless, TRSTS Reports ranked Midway Games fourth among 62 video game companies in sales of 32- and 64-bit home video games for fiscal 1997, up from seventh place the previous year. The company released seven new arcade games and fifteen new home games. In 1997 Midway released more games for the new Nintendo 64 system than any company except Nintendo itself.
In February 1998, Midway broke with its previous marketing strategy and announced that the following summer it would release home versions of the game "Bio Freaks" before an arcade version had appeared. According to a company spokesperson, Midway had made the decision in response to high consumer demand for a new fighting game that took advantage of the graphic possibilities of the next generation game systems like the Sony PlayStation and Nintendo 64. The company described the release as additional evidence of its commitment to the home market it was courting.
In March 1998 Midway expanded its product line into the market for personal computer games. It purchased back North American and Japanese distribution rights to Midway personal computer games that the company had granted to GT Interactive Software in 1995, a time when it was focusing its attention on the home console market. GT retained rights to distribute Midway personal computer games outside North America and Japan.
The Internal Revenue Service finally issued its ruling that the company's proposed spin-off would be tax free. On April 6, 1998, all Midway shares held by WMS were distributed among its shareholders. Each WMS share received 1.19773 Midway shares, and fractional shares were paid out in cash. Upon completion of the spin-off, Neil NiCastro resigned his positions as president, CEO, and chief operating officer of WMS to take over the chairmanship of Midway Games.
Focus on R&D in the Late 1990s
Midway significantly boosted its outlay for R&D from $32.5 million in fiscal 1996 to $55.9 million in 1997. Part of that was for advanced technologies whose ultimate marketability would only be proved in the indeterminate future. One example was WaveNet, a system for interactive video gaming. Once in place, WaveNet would comprise a private network of arcades linked electronically. Gamers would be able to play video games against opponents in different arcades, and even in different cities. Test arcades were set up in San Francisco and Los Angeles, but as of mid-1998 Midway was still evaluating the feasibility of the system and the company had no plans for national deployment.
The trends evident at Midway Games over the previous two years showed no sign of abating in summer 1998. Total revenues grew by about ten percent and the company expected its home video game revenues to double from the same quarter a year earlier, thanks to sales of games for the so-called "new generation" video consoles manufactured by Nintendo and Sony. Midway's arcade business continued to shrink, dropping by 25 percent compared to the previous year.
Midway planned, in fiscal 1999, to continue its strong presence in the Nintendo 64 and Sony PlayStation markets by releasing 28 new home video games, while planning 11 new arcade games. Midway was looking to become more active in other markets it had neglected. For example, the company planned to release twelve personal computer home games, in comparison to the previous year's total of two. Midway was also developing four games for the Game Boy system.

Midway announced on May 21, 2009 that it had received a takeover bid from Warner Bros., valued at more than $33 million dollars, to acquire most of the company's assets, including Midway's Chicago and Seattle studios and rights to the Mortal Kombat and Wheelman series. The offer did not include the San Diego and Newcastle studios or the TNA video game series.Midway had previously worked with Warner Bros. on several games including Mortal Kombat vs. DC Universe. Midway announced on May 28, 2009 that it would "accept binding offers up to June 24, 2009, to acquire some or all of the Company's assets." An auction was to be held on June 29, followed by a court hearing to approve the sale to the winning bidder or bidders. However, no other bids were placed for Midway's assets, and so the auction was canceled. On July 1, 2009, the bankruptcy court approved the sale of most of the company's assets to Warner Bros.
On July 8, 2009, Midway disclosed that it intended to close the San Diego studio by September. However, on August 19, 2009, THQ purchased the San Diego studio for $740,000 and extinguished Midway obligations to it. On July 10, 2009, pursuant to the terms of the Settlement Agreement that was approved by the bankruptcy court, Midway agreed to pay to affiliates of its majority owner, Mark Thomas, approximately $4.7 million in full satisfaction of all Midway debt to Thomas and his affiliates, and Thomas and his affiliates granted to Midway's Creditors' Committee an irrevocable proxy to vote his controlled shares of common stock in Midway and forever relinquished the right to vote or dispose of the shares. The settlement reduced Thomas's claims by 93 percent, and Midway continued to operate as a Debtor in Possession. Also on July 10, 2009, the sale of assets to Warner Bros. was completed. The total gross purchase price for the sale was approximately $49 million, including receivables, and Warner Bros. assumed liabilities. The sale also triggered payments under Midway's Key Employee Incentive Plan of approximately $2.4 million to company executives. The Midway Chicago studio, responsible for the Mortal Kombat series and other games, became part of Warner Bros. Interactive Entertainment and was later rebranded NetherRealm Studios.

Statistics:
Public Company
Incorporated: 1988
Employees: 553
Sales: $388.2 million (1996)
Stock Exchanges: NYSE
Ticker Symbol: MWY
SICs: 3651 Household Audio & Video; 3999 Manufacturing Industries, Not Elsewhere Classified; 7372 Prepackaged Software; 7993 Coin-Operated Amusement Devices; 7999 Amusement & Recreation, Not Elsewhere Classified


Address:
3401 North California Avenue
Chicago, Illinois 60618
U.S.A.
 
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