Midway Games

Midway Games was an American amusement and video-game company whose corporate history ran from 1958 until the completion of its liquidation around 2010. Founded in Chicago as Midway Manufacturing by Henry Ross and Marcine Wolverton, the business initially made mechanical amusement equipment. Its strategic importance changed after Bally Manufacturing acquired it in 1969 and, in the early 1970s, moved it into interactive entertainment. Midway became one of the principal American manufacturers and distributors of arcade video games during the industry’s formative period. The company’s first major breakthrough came through licensing. In 1978, it distributed Taito’s Space Invaders in the United States, helping establish the commercial scale of the American arcade boom. It subsequently licensed and distributed important Namco games, including Galaxian, Pac-Man, Ms. Pac-Man, and Galaga. These releases made Midway a central conduit through which Japanese arcade technology and game design reached the North American market. Bally combined its pinball operation with Midway in 1982, creating Bally Midway, a name that appeared on many of the company’s arcade releases. In 1988, Bally sold its amusement operations to WMS Industries, the former Williams Electronics organization. The business returned to the Midway name for video games while the Bally and Williams names continued to be used in pinball. Midway later absorbed or obtained rights connected with Williams and Atari Games, giving it access to properties such as Defender, Joust, Robotron: 2084, Gauntlet, and the Rush series. In 1994, WMS acquired Tradewest, whose home-console publishing operations became part of Midway Home Entertainment. This helped Midway expand from coin-operated machines into console publishing and distribution. WMS took Midway public in 1996 and spun off its remaining interest in 1998, making Midway independent. The company changed its corporate name from Midway Manufacturing to Midway Games Inc. in 1996 to reflect its home-console focus. Its best-known original modern franchise is Mortal Kombat, introduced in arcades in 1992 and developed into a major console, film, television, and licensing property. Other significant franchises include Rampage, Spy Hunter, NBA Jam, Cruis’n, NFL Blitz, and later Wheelman and TNA-related games. Midway was a major publisher at the turn of the century, ranking fourth among game publishers by sales in 2000. However, the company struggled to convert that market presence into sustained profitability. It exited the arcade business in 2001 as the coin-operated market declined, while its console development strategy required heavy investment. Midway acquired several studios between 2004 and 2005, including Surreal Software, Inevitable Entertainment, Paradox Development, and Ratbag Games, but later closed or consolidated several operations. The company also entered licensing agreements, including a 2005 deal involving Cartoon Network and Adult Swim properties. From 2000 onward, Midway posted recurring losses and became increasingly dependent on equity, debt, and credit facilities. Sumner Redstone was initially a significant minority shareholder and eventually controlled roughly 87% of the company before selling his stake to investor Mark Thomas in December 2008 for nominal cash while transferring associated debt. The change of control accelerated repayment obligations on certain debt instruments and deepened Midway’s liquidity crisis. Midway received a New York Stock Exchange delisting notice in November 2008 because its share price fell below the exchange’s minimum requirements. Midway and its U.S. subsidiaries filed for Chapter 11 bankruptcy protection on February 12, 2009. Warner Bros. Interactive Entertainment acquired most of the company’s assets, including the Chicago and Seattle studios and the rights to Mortal Kombat and Wheelman. Other assets and studios were handled separately, and the bankruptcy process completed liquidation in 2010.

Midway Manufacturing was established in 1958 by Henry Ross and Marcine Wolverton as a manufacturer of mechanical amusement equipment. Bally Manufacturing acquired the company in 1969. After producing mechanical arcade products, Midway entered video games in the early 1970s and developed a close licensing relationship with Japanese publisher Taito. The 1978 American release of Space Invaders was Midway’s breakthrough. The company then distributed important Namco products in North America, including Galaxian, Pac-Man, Ms. Pac-Man, and Galaga. Bally merged its pinball division with Midway in 1982, producing the Bally Midway identity. During the late 1970s and 1980s, the company was among the leading U.S. arcade manufacturers. It also acquired or received distribution rights connected with Sega and other publishers. WMS Industries purchased Bally Midway’s amusement operations in 1988. The business resumed the Midway name for video games, while WMS used Bally and Williams branding in pinball. Midway absorbed Williams’ video-game division in 1991 and later benefited from WMS’s acquisition of Time Warner Interactive, including Atari Games, in 1996. These corporate changes expanded Midway’s library with properties such as Defender, Joust, Robotron: 2084, Gauntlet, and Rush. To enter home-console publishing, WMS transferred its home-entertainment operations, including assets associated with Tradewest and Leland, to Midway. Midway Games Inc. became the corporate name in 1996, and WMS spun off its remaining ownership in 1998. Midway subsequently operated as an independent public company. Its arcade legacy continued, but its commercial focus increasingly moved toward consoles and personal computers. Mortal Kombat, introduced in 1992, became Midway’s defining modern franchise. The company also developed or published Rampage, Spy Hunter, NBA Jam, NFL Blitz, Cruis’n, Hydro Thunder, Ready 2 Rumble Boxing, and other action, sports, and racing properties. Midway closed its arcade division in 2001 and pursued a studio-acquisition strategy in 2004 and 2005, buying Surreal Software, Inevitable Entertainment, Paradox Development, and Ratbag Games. Ratbag’s Australian studio was closed only months after its acquisition. Despite a strong catalogue, Midway suffered recurring annual losses after 2000. It financed operations through stock offerings, debt, and credit facilities, while attempting to broaden its audience through mass-market releases and licensed properties. The company closed studios and reduced its operating footprint in 2008. David Zucker resigned as chief executive in March 2008, and Matt Booty became chief executive. In December 2008, Sumner Redstone sold his controlling interest to Mark Thomas. The change of control affected Midway’s debt arrangements and worsened its liquidity position. Midway filed for Chapter 11 protection on February 12, 2009. Warner Bros. acquired most of its assets after a bankruptcy sale process, while other properties and studios were treated separately. The bankruptcy court approved liquidation in 2010, and Midway ended its life as an independent public company. Its major intellectual property, particularly Mortal Kombat, survived through successor owners.

• 2010

  Liquidation is approved

  [1]Midway Gamesen.wikipedia.org

  The bankruptcy court approves Midway’s liquidation plan, ending the company’s independent corporate existence.

• 2009

  Chapter 11 filing

  [1]Midway Gamesen.wikipedia.org

  Midway Games files for bankruptcy protection and begins an asset-sale process.

• 2008

  Control changes and financial crisis deepens

  [1]Midway Gamesen.wikipedia.org

  Sumner Redstone sells his controlling stake, while debt-related obligations and liquidity problems intensify.

• 2005

  Ratbag Games is acquired and closed

  [1]Midway Gamesen.wikipedia.org

  Midway acquires Australian developer Ratbag Games, renames it Midway Studios–Australia, and closes the studio later that year.

• 2004

  Studio acquisition program begins

  [1]Midway Gamesen.wikipedia.org

  Midway acquires Surreal Software, Inevitable Entertainment, and Paradox Development to expand internal development capacity.

• 2001

  Arcade division closes

  [1]Midway Gamesen.wikipedia.org

  Midway exits the arcade manufacturing business and concentrates on home entertainment.

• 1998

  Midway becomes independent from WMS

  [1]Midway Gamesen.wikipedia.org

  WMS spins off its remaining Midway shares to WMS shareholders.

• 1996

  Midway Games Inc. is established

  [1]Midway Gamesen.wikipedia.org

  The company changes its corporate name to Midway Games Inc. as it expands into home-console publishing and completes an initial public offering.

• 1992

  Mortal Kombat launches

  [1]Midway Gamesen.wikipedia.org

  Midway introduces Mortal Kombat, which becomes its signature fighting-game franchise.

• 1988

  WMS acquires Bally Midway’s amusement operations

  [1]Midway Gamesen.wikipedia.org

  WMS Industries purchases the amusement operations and restores the Midway name for the video-game business.

• 1982

  Bally Midway identity begins

  [1]Midway Gamesen.wikipedia.org

  Bally consolidates its pinball division with Midway, and the combined business operates as Bally Midway.

• 1978

  Space Invaders becomes a breakthrough

  [1]Midway Gamesen.wikipedia.org

  Midway distributes Taito’s Space Invaders in the United States, establishing a major arcade hit.

• 1973

  Entry into video games

  [1]Midway Gamesen.wikipedia.org

  Midway begins developing and publishing arcade video games.

• 1969

  Bally acquires Midway

  [1]Midway Gamesen.wikipedia.org

  Bally Manufacturing purchases Midway, bringing the amusement business under the ownership of a major slot-machine and entertainment company.

• 1958

  Midway Manufacturing is founded

  [1]Midway Gamesen.wikipedia.org

  Henry Ross and Marcine Wolverton establish Midway Manufacturing as a producer of mechanical amusement equipment.

A mass-market arcade and console publisher built around recognizable action, sports, racing, and fighting franchises, with a particularly strong legacy in coin-operated entertainment and arcade-to-console adaptations.

• Fighting games · 1992

  Mortal Kombat

  Midway’s most influential original franchise, Mortal Kombat began as an arcade fighting game in 1992 and became known for digitized performers, supernatural characters, stylized violence, and finishing moves. Its success made it a central pillar of Midway’s console strategy and generated numerous sequels, spin-offs, adaptations, and licensing opportunities.

• Arcade games · 1978

  Space Invaders

  Midway distributed Taito’s Space Invaders in the United States beginning in 1978. The title was a landmark arcade release and provided Midway with its first major mainstream video-game success.

• Arcade games · 1980

  Pac-Man and Ms. Pac-Man

  Midway handled American distribution for Namco’s Pac-Man and its highly successful follow-up Ms. Pac-Man. These games strengthened Midway’s position as the leading North American channel for major Japanese arcade properties.

• Sports games

  NBA Jam

  NBA Jam was an arcade-oriented basketball series built around fast matches, exaggerated movement, recognizable professional players, and accessible two-on-two play. It became one of Midway’s best-known sports properties and was adapted across multiple home platforms.

• Sports games

  NFL Blitz

  NFL Blitz presented American football in an abbreviated, aggressive arcade format rather than as a full simulation. The series formed part of Midway’s strategy of turning sports licenses into immediately accessible arcade-style console products.

• Arcade action games

  Rampage

  Rampage is an arcade action franchise in which giant creatures destroy buildings and confront military forces. Midway retained the property through its ownership of earlier arcade assets and used it as one of its recognizable legacy brands.

• Action and driving games

  Spy Hunter

  Spy Hunter combined vehicular combat, espionage themes, and arcade driving. It was one of Midway’s established properties during its later console-focused period and was used to broaden the company’s portfolio beyond fighting and sports games.

• Racing games

  Cruis’n

  Cruis’n originated as an arcade racing property and emphasized straightforward driving, spectacle, and accessible play. It represented Midway’s continuing connection to coin-operated entertainment even after the company shifted its main business toward consoles.

• Arcade action games

  Defender

  Defender was among the important Williams-associated arcade properties that became part of Midway’s broader catalogue through the WMS corporate structure. Its fast scrolling-shooter design helped define the company’s historical arcade portfolio.

• Action and driving games

  Wheelman

  Wheelman was a later action-driving property associated with Midway’s console publishing business. Rights to the series were included among the assets acquired by Warner Bros. during Midway’s 2009 bankruptcy proceedings.

• 2009

  Shareholder-misleading allegations during bankruptcy period

  A lawsuit alleged that former Midway officers misled shareholders while selling their own stock. The U.S. District Court in Chicago dismissed the claims. The litigation occurred amid Midway’s bankruptcy and control-change crisis.

  Source

• 2007

  Psi-Ops copyright litigation

  Mindshadow Entertainment alleged that Midway had copied the story of Psi-Ops from a screenplay. In December 2008, a federal judge granted summary judgment for Midway, finding no evidence of copyright infringement.

  Source

Read more

• 2005Cartoon Network and Adult Swim publishing agreement

  United States

  Midway entered a publishing arrangement for games based on Cartoon Network and Adult Swim properties, with provisions allowing the relationship to expand to additional properties. The agreement formed part of Midway’s attempt to broaden its licensed and mass-market portfolio.

  Outcome. The agreement formed part of Midway’s attempt to broaden its licensed and mass-market portfolio.

  Source

• 2009

  Chapter 11 restructuring and asset saleOther

  Background

  Recurring losses, debt obligations, a control-triggered repayment crisis, and inadequate liquidity made continued independent operation difficult.

  Action taken

  Midway filed for Chapter 11 protection and pursued the sale of its assets through bankruptcy proceedings.

  Aftermath

  Warner Bros. acquired most of the company’s assets, while the bankruptcy court later approved liquidation.

  Source

• 2004

  Acquisition-led studio expansionStrategy

  Background

  Midway sought to increase its development capacity and market share by bringing independent studios into the company.

  Action taken

  The company acquired Surreal Software, Inevitable Entertainment, and Paradox Development, followed by Ratbag Games in 2005.

  Aftermath

  The expansion was followed by studio closures and restructuring, including the closure of the Australian Ratbag operation later in 2005.

  Source

• 2001

  Exit from arcade manufacturingStrategy

  Background

  The company faced a declining coin-operated arcade market and increasingly emphasized home-console and computer entertainment.

  Action taken

  Midway closed its arcade division and redirected resources toward home entertainment.

  Aftermath

  The decision ended Midway’s role as an active arcade manufacturer, although its arcade properties remained important to its publishing identity.

  Source

1. 1Midway Gamesen.wikipedia.org