Midway Drops "Non-Core Licenses"

[Dark Pulse]

Yesterday Midway posted a press release on their website, stating that they have terminated their "Non-Core Licenses", resulting in the cancellation of future versions of game properties to which they had publishing deals. What could this mean for Unreal and Epic?

"The resolution of these licensing arrangements on good terms for the company is a very positive step as we continue to review Midway's involvement with underperforming projects and focus on our core properties," said Matt Booty, interim CEO and president. "Our fall lineup and strong pipeline of games that tie in to market-leading licenses like DC Comics and TNA Wrestling underscore our strategy of aligning with consumer and entertainment properties that can drive a solid gaming experience."

 

[Dark Pulse]

Full Press Release:

Midway Focuses Development on Core Game Properties, Optimizes Licensing Line-Up

Termination of non-core licenses and other non-cash charges result in revised earnings guidance for third quarter

​

CHICAGO - October 16, 2008 – Midway Games Inc. (NYSE: MWY) today announced it has come to mutually beneficial terms with licensing partners resulting in the cancellation of future versions of related game properties and associated development expenditures. The resolution of these licenses accelerates non-cash charges into the third quarter ended September 30, 2008, and, combined with other non-cash charges, results in a revision of Midway's estimates for the third quarter.

Midway now expects a third quarter net loss of $0.70 per basic and diluted share, compared to its previously adjusted estimate of a net loss of approximately $0.49 per basic and diluted share. On a non-GAAP basis, which excludes approximately $0.10 of non-cash convertible debt interest expense, stock option expense, and deferred income tax expense related to goodwill, the Company now expects a loss of approximately $0.60 per basic and diluted share, compared to its prior estimate of $0.39 per basic and diluted share.

"The resolution of these licensing arrangements on good terms for the company is a very positive step as we continue to review Midway's involvement with underperforming projects and focus on our core properties," said Matt Booty, interim CEO and president. "Our fall lineup and strong pipeline of games that tie in to market-leading licenses like DC Comics and TNA Wrestling underscore our strategy of aligning with consumer and entertainment properties that can drive a solid gaming experience."

About Midway

Midway Games Inc. (NYSE:MWY), 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 can be found at www.midway.com.

 

[zynthetic]

Would be strange to dump the core title of the developer of the engine they're using in both of their mentioned core titles.

 

[TheIronKnuckle]

And what is said core title?
Surely not unreal. not epic. epic is GoW.
GoW is epic core title now.

 

[Sjosz]

TheIronKnuckle: That would be the Unreal Tournament franchise, which is still one of Epic's core franchises. And I'm sure zynthetic meant the engine for the core games of Midway is the same as Unreal Tournament's. And if not, it's still the same to Gears'.

 

[dub]

...Unreal Tournament franchise...which is still one of Epic's core franchises.

I really, really, really doubt that.

And I'm sure zynthetic meant the engine for the core games of Midway is the same as Unreal Tournament's. And if not, it's still the same to Gears'.

But that doesn't say anything about UT's future. Midway can keep licensing the UE3, but that doesn't mean that Midway needs to release a UT game.

I don't think other developers using the Unreal Engine, or Midway licensing it, is in anyway linked to what game titles Midway decides to publish.
What Epic does with the Unreal Engine, who they license it to - is totally independent of what they themselves decide to release as a game. I would guess.

I'm not sure I understand the news statement fully, but if this means Epic don't have to make another UT now that they aren't bound to that contract any more... then I really can't see Epic making another UT, personally.

 

[UndeadRoadkill]

Buddy of mine used to work for Midway, but he got the axe a couple months back during some massive layoffs. Clearly, they're not doing too well, he thinks MK vs DC is their last hope.

He claims to have been in the room when the "From the Studio that Brought You Gears of War" tagline was born, and he heard the reason for no advertising for the UT3 PC release was because, in their words, "who plays PC games?" gg, Midway.

which is still one of Epic's core franchises.

Even if that were the case, I doubt it's considered one of Midway's core licenses. I would not be the least surprised to find that the second UT game in the contract is cut. A lot of people anticipated that one coming miles away.

 

[Sjosz]

Nobody said I was arguing that UT is one of Midway's core licenses, or that me saying Midway's UE licenses have anything to do with UT's future as a franchise. I was merely responding to TheIronKnuckle.

 

[dub]

Even if that were the case, I doubt it's considered one of Midway's core licenses. I would not be the least surprised to find that the second UT game in the contract is cut. A lot of people anticipated that one coming miles away.

I'd agree with that.

I thought I remembered a post by Jeff Morris on these boards. When someone said something to the extent of "this might be the last UT" Morris then answered that they have the said contract with Midway. What struck me about that was that it didn't sound like "yes, we really want to make another UT", but more like "yes, we have to make another one", which hardly bodes well for the series.

One could have been hopeful that if Epic themselves wouldn't make another UT they would have given it up to another Developer again, but now if they don't actually have a publisher for this title any more, even that seems unlikely to happen, to me.

Nobody said I was arguing that UT is one of Midway's core licenses, or that me saying Midway's UE licenses have anything to do with UT's future as a franchise. I was merely responding to TheIronKnuckle.

Isn't that what Zynthetic is saying though? (That because Epic make the engine for other games they publish, it'd be a reason to include UT in their category of core Licenses. ie. games that won't be dropped)
Maybe I misunderstood. I wasn't trying to be agro at anyone, or prove anything wrong. Just throwing discussion about

Gears doesn't even enter into this, as it's published by MS.

 

[TheIronKnuckle]

Well in any case, i still hope there is another BETTER unreal game coming

 

[UndeadRoadkill]

That would be sweet, but do you think anyone will consider it "profitable" enough to actually do?

 

[TheIronKnuckle]

No, but i still hope.

 

[Poker]

of course it's profitable, if they manage the project properly this time.

They've already got UT3 to build from ... if they can put some real creativity into a couple new game types, and ffs get the UI right, there is NOTHING stopping them from equaling or even surpassing the success of UT2004, just on PC alone.

Then triple or quadruple that for each console release ... how is that not profitable? Now, will Epic and whoever their next publisher is have the stones to invest what's necessary to turn those profits, I'll admit that's another story.

 

[Grobut]

Well, its pretty obvious that Midway is in serious trouble, they have been for a while now, that much we know, but i guess the wolves are finally at the door, and when a company is in water that deep, they can only afford to back projects that they are sure will turn a good profit, there's nolonger money to back projects that aren't a sure thing, or even projects that just make an ok profit, there's no margin for error and the product must sell well so they can refill their bank accounts, and have a surplus they can use for future investments.

This does not bode well for that 3'rd UT game Epic was supposed to make under Midway, because UT3 did not sell as well as anyone hoped, and thus, the next one is by no means a garuenteed money maker, and is most likely amongst the titles that are getting terminated, it would come as no suprice.


And i'm not too optimistic that Epic wants to do a new Unreal game any time soon, GoW is their focus now, as is the Console market, and they are launching some new IP through PCF that they will also want to back, i just don't see Unreal or UT in the cards to be honest.

 

[MonsOlympus]

So this just means midway can use other engines other than UE for their inhouse titles now hey? Not much news really, I mean MK vs DC is lookin great but if it doesnt pay off they might be better off licensing something cheaper and looking at a different market.

Or wait, this says they are dropping non-core license... Didnt they sign a deal for core license to UE... hmmz

 

[Nemephosis]

If the next UT is going to be like UT3, maybe this is for the best.

 

[UndeadRoadkill]

of course it's profitable, if they manage the project properly this time.

They don't even want to put GoW2 on PC, do you really think they'd invest in a follow-up to something that didn't do so hot to begin with?

 

[Alhanalem]

If the next UT is going to be like UT3, maybe this is for the best.

Not really, because minus the menus and need to edit ini files to change certain options, it's really a far better game than 2k4 was. But that's just my opinion. I think the core gameplay is solid.

 

[UndeadRoadkill]

Not really, because minus the menus and need to edit ini files to change certain options, it's really a far better game than 2k4 was. But that's just my opinion. I think the core gameplay is solid.

Do you think they have any innovation left in them for a UT4? They tightened up the gameplay for games we've been playing for years, swell. But it seems like instead of doing anything new, they just slapped together some cutscenes and raped the franchise to force in some silly story that didn't fit, and that was that. I don't think we need more Unreals of War.

 

[TheIronKnuckle]

Not really, because minus the menus and need to edit ini files to change certain options, it's really a far better game than 2k4 was. But that's just my opinion. I think the core gameplay is solid.

I agree. The only thing i actually hate about ut3 is the campaign mode. The UI is horrible but i can live with it.
If the UI was revamped and a tournament mode was added in i would be a happy camper. (Although i would also need the level descriptions on a lot of the levels to change. There are too many references to the campaign mode in those descriptions.)

That is the main requirement for me really. Once that was done all they would have to do is make a whole truckload of maps and i would be playing this game for the next 3 years.