Time Warner Buying Most of Midway Games for $33 Mln

Time Warner has walked away with most of Midway Games' assets for a cool $33 million...in part because no other bidders were interested in the struggling company.

Midway Games—the company that served as home to Mortal Combat, Wheelman, Joust, Gauntlet, Spy Hunter, and many other well-known titles—has had more of its assets acquired by Time Warner for $33 million at bankruptcy auction. The sale was approved on July 2, and will become final within ten days. Under the terms of the arrangement, Time Warner gets the majority of Midway’s game properties and assets, although there are a few exceptions: Midway’s San Diego and Newcastle studios aren’t part of the deal, and the film company Thresher Entertainment claims it controls most of the intellectual property for Mortal Kombat, meaning a new deal will likely have to be worked out with Time Warner before any new Mortal Kombat titles appear.

Midway is still looking for buyers for its San Diego and Newcastle studios; if none are found within 60 days, the company plans to shut them down.

Despite a deep catalog of game titles and some publishing successes (such as the Unreal franchise, owned by Epic and presumably now looking for a new publisher), Midway Games hasn’t been profitable for almost a decade. Following the release of Mortal Kombat vs. DC Universe, controlling investor Sumner Redstone sold his stake in the company for a mere $100,000; late last year, Midway announced a round of belt-tightening in which it jettisoned under-performing and in-development titles and laid off about a quarter of its workforce. Shortly thereafter, the company filed for bankruptcy, and creditors filed a motion with the bankruptcy court essentially detailing how Redstone’s sale had torpedoed the company’s value in the market and ability to recover.

The solution was to sell off Midway’s assets at auction; although the company was hoping for more thsn $33 million, Time Warner turned out to enter the only formal bid on Midway. This may bode well for the DC Universe tie-ins—Warner Bros. has long handled television, film, and movie adaptations of DC Comics properties. However, at this point, the future of most Midway titles remains very uncertain.