I would have called this a Cheap Ass Deal if Midway wasn't suffocating in debt.
http://www.gamesindustry.biz/articles/redstone-sells-midway-for-100-000
http://www.gamesindustry.biz/articles/redstone-sells-midway-for-100-000
Midway sold for $100,000
- Thread starter eswat
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[quote name='mtxbass1']Smart of Redstone. This should net National Amusements about an 800 million dollar loss on paper. That tax loss will be very beneficial to them, as it represents about half of their outstanding debt.[/quote]
It's common practice to buy failing companies loaded with debt to offset tax liabilities... especially since you can carry it forward (sometimes backward a couple years). Corporations are great because of limited liability, but suffer from double taxation; that is the company is a "person" and will pay taxes, and the 'owners' will pay income tax on wages/bonuses/ect. Profits are nice and all, but ideally you find a way to put revenue back into the company rather than show profit and pay taxes.
It's common practice to buy failing companies loaded with debt to offset tax liabilities... especially since you can carry it forward (sometimes backward a couple years). Corporations are great because of limited liability, but suffer from double taxation; that is the company is a "person" and will pay taxes, and the 'owners' will pay income tax on wages/bonuses/ect. Profits are nice and all, but ideally you find a way to put revenue back into the company rather than show profit and pay taxes.
Survivor Charlie
CAGiversary!
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If I had known I could buy Midway for that much, I would have immediately bought it for that much and assumed the debt.
I would have leveled off the debt by immediately restructuring all the licensing agreements and relicensing all the franchises Midway owns out to other companies for development in cell-phone/I-Pod stuff, would have put the main development teams into putting together modern versions of classic games and releasing them ala Namco who's making a boatload with Pac-Man Championship Edition on Live. And finally, I would have sold off the Mortal Kombat franchise to the highest bidder.
Presto, we're out of debt. And I still own some of the most recognizable name-brand franchises in gaming history plus facilities to make new games.
CAG should pull our collective money together and buy Midway off this guy, put a consortium of our most knowledgeable gamers together to run it. Me as President of course.
I would have leveled off the debt by immediately restructuring all the licensing agreements and relicensing all the franchises Midway owns out to other companies for development in cell-phone/I-Pod stuff, would have put the main development teams into putting together modern versions of classic games and releasing them ala Namco who's making a boatload with Pac-Man Championship Edition on Live. And finally, I would have sold off the Mortal Kombat franchise to the highest bidder.
Presto, we're out of debt. And I still own some of the most recognizable name-brand franchises in gaming history plus facilities to make new games.
CAG should pull our collective money together and buy Midway off this guy, put a consortium of our most knowledgeable gamers together to run it. Me as President of course.
Survivor Charlie
CAGiversary!
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[quote name='SuxoR']Cheapy could probably do it and have Wombat and Shipwreck consult it 
[/QUOTE]
Eh, that Japanese Gaming Culture has likely harshed cheapy's mellow.
In all seriousness, Midway has not been competitive in a long, long time. Their most profitable game in the last few years? Game Party on the Wii.
So I would reposition Midway as a casual gaming company. And I don't mean Wii and DS... I mean like Popcap Games casual. I would slash production budgets, eliminate licensing for development and instead license out my own IPs.
Do you know what owning Midway gets you?
-Arch Rivals
-Area 51
-Blitz
-Carnevil
-Cruis'n
-Defender
-Gauntlet
-Gorf
-Joust
-Mace
-Mortal Kombat
-NARC
-NBA Jam
-Primal Rage
-Rampage
-Robotron
-San Francisco Rush
-Smash TV
-Spy Hunter
-Tapper
And the list goes on.
Where Midway messed up is they would do insane things like pay $10,000,000 for the rights to TNA Wrestling. Seriously? TNA?
I would attempt to void all existing licenses. I would tell companies like TNA "look, we're moving away from consoles and towards casual market. You've made an ok chunk of change with the previous administration. Now we're giving you a chance to explore elsewhere. Free of charge. You owe us nothing to void."
I would license the list of franchises above out to other companies, or sell them outright if I thought the brand was valuable enough that it would fetch a large price, such as Mortal Kombat and maybe the Rush series. The sports series such as Blitz and NBA Jam I would sell to EA, whom I'm sure would love to own the rights to them and would pay fair value on them.
I would refocus inhouse development on casual PC/Cell Phone games, with limited focus on WiiWare/Live Arcade/PSN titles, and sell off all high-end work stations.
I would slash budgets in large numbers and dump existing products into the market place at budget prices.
I would sadly cut the work force down. Not pleasant but it must be done. I would cut the marketing force as well.
But I would refocus the company website to be a hub for buying casual games much like PopCap or Big Fish Games' website.
I've given wayyyy too much thought to this. Though truth be told, I could have sold my game collection and had raised the cash. And had I known that Midway was on the block for such a low price, I would have.
[/QUOTE]Eh, that Japanese Gaming Culture has likely harshed cheapy's mellow.
In all seriousness, Midway has not been competitive in a long, long time. Their most profitable game in the last few years? Game Party on the Wii.
So I would reposition Midway as a casual gaming company. And I don't mean Wii and DS... I mean like Popcap Games casual. I would slash production budgets, eliminate licensing for development and instead license out my own IPs.
Do you know what owning Midway gets you?
-Arch Rivals
-Area 51
-Blitz
-Carnevil
-Cruis'n
-Defender
-Gauntlet
-Gorf
-Joust
-Mace
-Mortal Kombat
-NARC
-NBA Jam
-Primal Rage
-Rampage
-Robotron
-San Francisco Rush
-Smash TV
-Spy Hunter
-Tapper
And the list goes on.
Where Midway messed up is they would do insane things like pay $10,000,000 for the rights to TNA Wrestling. Seriously? TNA?
I would attempt to void all existing licenses. I would tell companies like TNA "look, we're moving away from consoles and towards casual market. You've made an ok chunk of change with the previous administration. Now we're giving you a chance to explore elsewhere. Free of charge. You owe us nothing to void."
I would license the list of franchises above out to other companies, or sell them outright if I thought the brand was valuable enough that it would fetch a large price, such as Mortal Kombat and maybe the Rush series. The sports series such as Blitz and NBA Jam I would sell to EA, whom I'm sure would love to own the rights to them and would pay fair value on them.
I would refocus inhouse development on casual PC/Cell Phone games, with limited focus on WiiWare/Live Arcade/PSN titles, and sell off all high-end work stations.
I would slash budgets in large numbers and dump existing products into the market place at budget prices.
I would sadly cut the work force down. Not pleasant but it must be done. I would cut the marketing force as well.
But I would refocus the company website to be a hub for buying casual games much like PopCap or Big Fish Games' website.
I've given wayyyy too much thought to this. Though truth be told, I could have sold my game collection and had raised the cash. And had I known that Midway was on the block for such a low price, I would have.
[quote name='Survivor Charlie']
Do you know what owning Midway gets you?
-Arch Rivals
-Area 51
-Blitz
-Carnevil
-Cruis'n
-Defender
-Gauntlet
-Gorf
-Joust
-Mace
-Mortal Kombat
-NARC
-NBA Jam
-Primal Rage
-Rampage
-Robotron
-San Francisco Rush
-Smash TV
-Spy Hunter
-Tapper
[/quote]
Hey... you missed Shadow Hearts. They only published it though, but still. I don't know if Midway was a good acquisition though really. Mortal Kombat is basically dead, no way could even a new-gen MK beat Soul Calibur. Gauntlet is a good series but unfortunately hasn't had a real title since N64. The PS2 was an enchanced N64 if I recall. Rush has been dead for so long, GTA: III and Burnout will undoubtedly beat it in a second. Rampage: Total Destruction was so bad it made casual gamers cry. With the 3rd dimension Rampage just can't succeed.
I'd love to see a sequel to Tapper. Hopefully they'd go Fallout 2 vs. Fallout 3 style on it and somehow turn it into a FPS. That'd be wonderful. Spy Hunter has a chance in the new gen, but 2 didn't do too well. Blitz is a dead series now that NFL made them clean everything up. The League gave Blitz hope again, but for some reason without familiar names it's just not fun.
Shadow hearts also gave Midway some familiarity with the RPG scene, but SH: III was released by another publishing company (somehow linked to former SquareSoft if i recall), therefore they lost another series that could've taken in moderate revenue.
All in all, Midway ruled the 90's but the 00's and the 10's are too rough for Midway. And sorry to say, but there's 100,000 that could've been used to buy a nice car instead of a nice car game with 79 million in debt.
Do you know what owning Midway gets you?
-Arch Rivals
-Area 51
-Blitz
-Carnevil
-Cruis'n
-Defender
-Gauntlet
-Gorf
-Joust
-Mace
-Mortal Kombat
-NARC
-NBA Jam
-Primal Rage
-Rampage
-Robotron
-San Francisco Rush
-Smash TV
-Spy Hunter
-Tapper
[/quote]
Hey... you missed Shadow Hearts. They only published it though, but still. I don't know if Midway was a good acquisition though really. Mortal Kombat is basically dead, no way could even a new-gen MK beat Soul Calibur. Gauntlet is a good series but unfortunately hasn't had a real title since N64. The PS2 was an enchanced N64 if I recall. Rush has been dead for so long, GTA: III and Burnout will undoubtedly beat it in a second. Rampage: Total Destruction was so bad it made casual gamers cry. With the 3rd dimension Rampage just can't succeed.
I'd love to see a sequel to Tapper. Hopefully they'd go Fallout 2 vs. Fallout 3 style on it and somehow turn it into a FPS. That'd be wonderful. Spy Hunter has a chance in the new gen, but 2 didn't do too well. Blitz is a dead series now that NFL made them clean everything up. The League gave Blitz hope again, but for some reason without familiar names it's just not fun.
Shadow hearts also gave Midway some familiarity with the RPG scene, but SH: III was released by another publishing company (somehow linked to former SquareSoft if i recall), therefore they lost another series that could've taken in moderate revenue.
All in all, Midway ruled the 90's but the 00's and the 10's are too rough for Midway. And sorry to say, but there's 100,000 that could've been used to buy a nice car instead of a nice car game with 79 million in debt.
[quote name='62t']they no longer own shadow hearts since Xseed picked up the series. Midway didnt pick up after spending extra money on advertising shadow hearts 2 but the sales did not met expectation.[/quote]
Yeah according to Wikipedia...
Shame too, atleast Shadow Hearts is in better hands now. Doubt we'll get a SH IV though.
Yeah according to Wikipedia...
Shame too, atleast Shadow Hearts is in better hands now. Doubt we'll get a SH IV though.
All you little entrepreneurs are cute with your plans, but here's how it works in the real world:
At first blush, it would appear that Thomas is getting a $30-million company for $100,000. But let's look deeper.
On the credit side of the ledger, he gets 87% of a video game publisher that owns the Mortal Kombat franchise. Midway also had $10.5 million in cash and $21.6 million in receivables as of its last quarter, ended Sept. 30. He also gets a $70-million I.O.U. that Midway once owed to National Amusements -- Midway's payments on that loan will now go to Thomas.
On the debit column, Midway has $150 million in outstanding loans, not including the $70 million it will owe Thomas. It also has a payroll of about 900 employees that it is struggling to meet. Last quarter, the company lost nearly $76 million on $51.4 million in revenue.
"The company is cash-flow negative," Pachter said. "So unless someone sinks more working capital into it, all [Thomas] can do is liquidate it and hope there's more than $100,000 left at the end of the day."
At first blush, it would appear that Thomas is getting a $30-million company for $100,000. But let's look deeper.
On the credit side of the ledger, he gets 87% of a video game publisher that owns the Mortal Kombat franchise. Midway also had $10.5 million in cash and $21.6 million in receivables as of its last quarter, ended Sept. 30. He also gets a $70-million I.O.U. that Midway once owed to National Amusements -- Midway's payments on that loan will now go to Thomas.
On the debit column, Midway has $150 million in outstanding loans, not including the $70 million it will owe Thomas. It also has a payroll of about 900 employees that it is struggling to meet. Last quarter, the company lost nearly $76 million on $51.4 million in revenue.
"The company is cash-flow negative," Pachter said. "So unless someone sinks more working capital into it, all [Thomas] can do is liquidate it and hope there's more than $100,000 left at the end of the day."
[quote name='SuxoR']Haha kinda sad but I guess if they can't make a decent came since MK Trilogy then they brought it onto themselves[/QUOTE]
Except that they have made several decent "cames" since MK Trilogy, including the recent MK vs. DC, where only the most snobby, annoying dickhead gamer wouldn't find at least something to like.
Except that they have made several decent "cames" since MK Trilogy, including the recent MK vs. DC, where only the most snobby, annoying dickhead gamer wouldn't find at least something to like.
Monsta Mack
CAGiversary!
Adios Blitz and Mortal Kombat? Maybe even further sales on those two? Works for us
[quote name='QiG']At first blush, it would appear that Thomas is getting a $30-million company for $100,000. But let's look deeper.
On the credit side of the ledger, he gets 87% of a video game publisher that owns the Mortal Kombat franchise. Midway also had $10.5 million in cash and $21.6 million in receivables as of its last quarter, ended Sept. 30. He also gets a $70-million I.O.U. that Midway once owed to National Amusements -- Midway's payments on that loan will now go to Thomas.
On the debit column, Midway has $150 million in outstanding loans, not including the $70 million it will owe Thomas. It also has a payroll of about 900 employees that it is struggling to meet. Last quarter, the company lost nearly $76 million on $51.4 million in revenue.
"The company is cash-flow negative," Pachter said. "So unless someone sinks more working capital into it, all [Thomas] can do is liquidate it and hope there's more than $100,000 left at the end of the day."[/quote]
I expect Thomas to take a loss. I doubt he will be able to sell enough to overcome his new debt. After Mortal Kombat, what else is there that's actually worth big money? NBA Jam? Blitz Football? Ouch.
On the bright side, for us, here's hoping Capcom buys Mortal Kombat and gives us a Street Fighter vs. Mortal Kombat game with Street Fighter gameplay. That would be great.
On the credit side of the ledger, he gets 87% of a video game publisher that owns the Mortal Kombat franchise. Midway also had $10.5 million in cash and $21.6 million in receivables as of its last quarter, ended Sept. 30. He also gets a $70-million I.O.U. that Midway once owed to National Amusements -- Midway's payments on that loan will now go to Thomas.
On the debit column, Midway has $150 million in outstanding loans, not including the $70 million it will owe Thomas. It also has a payroll of about 900 employees that it is struggling to meet. Last quarter, the company lost nearly $76 million on $51.4 million in revenue.
"The company is cash-flow negative," Pachter said. "So unless someone sinks more working capital into it, all [Thomas] can do is liquidate it and hope there's more than $100,000 left at the end of the day."[/quote]
I expect Thomas to take a loss. I doubt he will be able to sell enough to overcome his new debt. After Mortal Kombat, what else is there that's actually worth big money? NBA Jam? Blitz Football? Ouch.
On the bright side, for us, here's hoping Capcom buys Mortal Kombat and gives us a Street Fighter vs. Mortal Kombat game with Street Fighter gameplay. That would be great.
bread's done