Midway Games, famous for developing the Mortal Kombat franchise and other games, has filed for Chapter 11 bankruptcy protection. They cite the onset of debt troubles as the cause.
Midway ran into this difficulty after media baron Sumner Redstone sold his 87 percent stake to private investor Mark Thomas. This triggered a change-of-control provision that allows shareholders to sell their shares. Midway warned share holders earlier that they wouldn’t be able to pay if asked for money back. Looks like they were telling the truth.
Mr. Redstone sold his stake after losing hundreds of millions of dollars last year while the stock tanked. This comes after almost nine years of straight losses starting in June 2000.
Midway says that the Chapter 11 filing includes only operations within the U.S. and that they will continue as a player in the videogame industry.
This is still sad news. With other former giants bleeding cash or closing up shop, these are going to be dark times for the supposedly recession-proof games industry. Get better soon, Midway. Without you, where will I ever find a use for all those Mortal Kombat combos I memorized?