Publisher ends deal for one internally, one externally developed title based on non-owned IPs; list of suspects includes NBA Ballers, Unreal Tournament.
On Tuesday with much fanfare, Midway Games revealed the November 16 release date for Mortal Kombat vs. DC. Yesterday, the company made much lower-key announcement that it will cease publishing games based on two licensed IP currently in its portfolio. In a brief press release, the company said it had "come to mutually beneficial terms with licensing partners resulting in the cancellation of future versions of related game properties and associated development expenditures."
As a result of the agreement, Midway's third-quarter fiscal losses will nearly double. Instead of the $0.37 per share loss it forecast during its August 4 earnings call, the company now expects to lose $0.70 per share due to charges from the cancellation. That means the company's shortfall will be nearly double that of the April-June quarter, when it lost $0.38 per share, or a $34.8 million net loss. By that calculus, the publisher's red ink will increase by $0.33 per share, or about a $30 million, as a result of canceling the licensing arrangements.
"We made some deals back during the last console cycle, and obviously the economics have changed drastically since then," a Midway rep told GameSpot. "We take a charge now, and then we're freed up with these resources to be spent elsewhere."
More intriguing than Midway's latest financial losses is the identity of the canceled licenses. Currently, the majority of Midway titles are original IPs such as Mortal Kombat, Gauntlet, Area 51, and Blitz. The Midway rep also emphasized that Stranglehold and Wheelman are "wholly owned properties," and that the latter game is still on track for an early 2009 release. Midway also said it is still planning on publishing wrestling games bearing the TNA Impact! imprint and its deal with DC Comics remains in place.
So what IPs does that leave? The rep said that he could comment on which licenses the Chicago-based company is cutting loose. However, the did rep say that, Midway was opting out of publishing two licensed series--one developed internally at one of Midway's studios, the other externally by a third party. Read more...
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