The last-minute revelation of Necessary Force wasn't enough to save developer Midway Newcastle, as the studio failed to find a buyer and has now been officially closed.

Newcastle, responsible for last year's action-driving title Wheelman, was not among the assets Warner Bros. recently picked up from bankrupt parent company Midway. Warner now owns "substantially all of [Midway's] U.S. assets," including the Mortal Kombat, This Is Vegas and Wheelman properties plus studios in Seattle and Chicago.

Roughly 80 people were let go, according to Kotaku, with Midway looking to close TNA series developer Midway San Diego in September if a buyer cannot be found. Other franchises still up for grabs include the TNA license and the rights to Necessary Force.

With bankrupt publisher Midway seeking to offload a majority of its assets, such as the Mortal Kombat franchise, subsidiary Midway Newcastle has revealed its latest project in hopes of enticing a prospective buyer for the England-based studio and staff.

Dubbed "Necessary Force," the studio's current project in an original property that sees players take control of a do-whatever-it-takes detective in a corrupt open-world.

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Media conglomerate Time Warner has made a $33 million offer, via its Warner Bros. Entertainment subsidiary, to purchase assets from bankrupt publisher Midway.

The proposal sees Warner attempting to purchase "substantially all of [Midway's] U.S. assets," including the Mortal Kombat franchise plus development studios in Seattle and Chicago. However, Midway was clear that the Warner offer does not include the TNA franchise, the Midway San Diego studio and Wheelman developer Midway Newcastle.

The two companies are now in a "stalking horse" agreement, with a "court-supervised auction process...intended to achieve the highest value possible for [Midway's] stakeholders" set to occur before the court can approve or deny the Warner bid.

The internal Midway team responsible for development on the Mortal Kombat series is looking to leave the company, according to a Kotaku report citing anonymous sources.

The report says the team, which most recently developed Mortal Kombat vs. DC Universe, is currently in talks with various publishers in an effort to relocate.

Sources indicated that the search for a new home began after Midway failed to pay out bonuses for meeting Mortal Kombat vs. DC Universe sales targets. Midway representatives claim that the unsecured creditors committee is holding up the payments.

Midway announced earlier this month a plan to sell the Mortal Kombat franchise. At the time, Midway had proposed an incentive plan to give bonuses to remaining employees, while admitting it would be unable to reimburse ex-employees for unused paid time off.

In its continued struggle against bankruptcy, Midway has proposed an incentive plan that would see some remaining employees receive bonuses for meeting certain goals, though the company is unable to reimburse ex-employees for unused paid time off.

Three specific milestones are outlined in the plan. The first, to find a co-publisher for Wheelman, was accomplished a few days before the plan was filed on February 23. That accomplishment was worth a $497,500 bonus, reports netDockets.

The other two milestones, as-yet-unaccomplished, are to sell the Mortal Kombat property to another company or submit a new reorganization plan. Either is worth $1,292,500. Closing either deal with then bring about another $1,965,000.

The Mortal Kombat fighting series is easily the most well-known... Read more

As Midway's spiral into bankruptcy continues, Ubisoft has announced that it will be handling the sales, marketing and distribution of Wheelman in most major markets.

In development at Midway's Newcastle studio, the driving-action game starring "action-film megastar" Vin Diesel will hit PC, PlayStation 3 and Xbox 360 on March 24. Previously, Midway was set to handle all publishing duties for the title.

An Xbox 360 and PlayStation 3 demo of Wheelman is expected before its release.

Specifically, Ubisoft will be responsible for the game's sales, marketing and distribution in North America, South America, Australia, New Zealand, France, Germany, Austria, Switzerland, Ireland and the United Kingdom. Under the deal, Midway retains its future rights to the franchise, and the ability to sell the game in all other European territories.

Struggling Mortal Kombat publisher Midway has filed for Chapter 11 bankruptcy protection in the United States, citing an inability to repay its $150 million debt potentially due next week.

The filing does not affect its non-U.S. operations, which will continue "as normal."

The company plans to reorganize but "conduct its business operations as usual," with CEO Matt Booty noting that "Midway enters this process with strong underlying fundamentals, as evidenced by solid fourth quarter sales that exceeded expectations in spite of a challenging retail and general economic environment."

"This filing will relieve the immediate pressure from our creditors and provide us time for an orderly exploration of our strategic alternatives," he explained.

After Midway was sold for a paltry $100,000, some investors were able to demand reimbursement due to the change in leadership. They initially had until mid-January to decide if they wanted to collect, but the deadline was postponed until February 19.

In all, Midway faces $240 million in debt, though only $150 million may be due February 19. That $150 million is the sum of two $75 million investments, which originally weren't due to be repaid until 2025 and 2026.

Hidden away within a press release regarding shipment figures for Mortal Kombat vs. DC Universe was the first official word that Midway is planning another series entry.

"We're already hard at work on our next version of Mortal Kombat, and look forward to being able to reveal more details in the future," said franchise co-creator Ed Boon.

While the publisher did not disclose how many copies of Mortal Kombat vs. DC Universe have actually been sold, it did note that "approximately 1.8 million units" of the PlayStation 3 and Xbox 360 fighter have been shipped since its November 16 release.

Midway is currently $240 million in debt and facing possible bankruptcy in February.

Struggling publisher Midway may now have another month before it faces bankruptcy, as some of its investors have agreed to postpone a payback deadline until February 19.

After majority shareholder Sumner Redstone sold 87% of the Mortal Kombat publisher for $100K, investors were able to demand repayment due to the change in control.

All together, Midway faces $240 million in debt, though it is primarily concerned with $150 million of that, which is owned in $75 million increments to two groups of holders. As of December, the company did not believe it could immediately pay the $150 million. Midway originally had until 2025 to repay one group, and 2026 for the other.

Previously, the investors had until mid-January to decide if they wanted their money back. Now, Midway has convinced one group to hold off until February 19, and is attempting to persuade the other group of holders to give it just a little more time.

Midway's remaining $90 million debt is owed to Redstone's theater business National Amusements. Oddly, that debt was not mentioned in Midway's update, perhaps implying that National Amusements may not demand immediate repayment.

Facing $240 million of debt, struggling publisher Midway has announced a cost-cutting plan that will see the company axe 25% of its workforce and cancel several games.

Under the plan, Midway will close its Austin-based development branch, which was most recently responsible for BlackSite: Area 51. After the shooter released, creative director Harvey Smith described the game's development as "so fucked up."

In addition, Midway Chicago (Mortal Kombat vs. DC) and San Diego will see layoffs.

The cancelled games were slated to hit in 2010 or 2011, and had not been made public. Midway's announcement described the halted projects as "non-core."

"These initiatives, along with the other steps we have taken this year, are a response to the specific challenges we are facing at Midway, many of which have been amplified by the current economic conditions," said Midway CEO Matt Booty.

When Midway majority shareholder Sumner Redstone sold off his 87% stake in the company for a paltry $100K, the move did more than send stock prices plummeting. Due to the change in control, Midway's creditors can demand immediate payment.

Midway currently faces $240 million in debt, it admitted in an SEC Filing, with $90 million owed to Redstone's theater business National Amusements. Midway has 20 days to notify investors of the control change, and creditors have 30 days to demand payment.

Should all those creditors demand their money, the beleaguered publisher, recently responsible for Mortal Kombat vs. DC and Blitz: The League II, does not believe "it would have the ability to satisfy its obligations to repay these amounts."

In other words, Midway could be bankrupt come January 20, 2009. The company has not posted an annual profit since 1999. In the past year, CEO David Zucker and chairwoman Shari Redstone have both left the troubled publisher. Before her departure, Redstone pledged more active involvement in an attempt to better the company's prospects.

To aide in these troubled times, the company has brought on analyst firm Lazard "to assist it in the evaluation of strategic and financial alternatives available."

Publisher Midway's stock has plummeted almost 40% since Sumner Redstone's sale of the company for an embarrassing $100,000, settling at an all-time low of 23 cents per share.

Friendly investor Mark Thomas purchased Redstone's majority shares of Midway on Monday. Though the publisher is still valued at $21 million, it also carries some $70 million in debt--a fatal figure that could actually be as high as $150 million, according to Variety.

The Mortal Kombat publisher is now in danger of being brutally delisted from the New York Stock Exchange, and must raise its share worth above $1 within six months.

Media magnate Sumner Redstone has sold his majority stake in Mortal Kombat publisher Midway for a paltry $100,000, according to the Wall Street Journal.

Analyst Michael Pachter once estimated that Redstone spent between $500 and $700 million on Midway stock since 1983. But Midway's stock price has plummeted in recent years, falling from $23 a share in 2005 to 38 cents last Friday.

Redstone's controlling interest was sold to investor Mark Thomas for $0.0012 a share. Redstone will take a loss on the sale, but stands to gain from tax benefits.

Thomas will inherit the company's $70 million in debts, and will be charged with stomaching the company's growing losses and frequent layoffs.

Following news this week that Midway's decision to use the Unreal Engine was implicated in the publisher's rapid decline, Ben Fritz of Variety clarified his original story, stressing that the Unreal Engine itself is not at fault.

"To be direct: my sources are not saying Unreal Engine, and Epic Games, are the cause of its problems," Fritz wrote. "Rather it's the decision by Midway to use UE3 for all its games, and subsequent problems adapting the code, which caused game delays and then cash flow problems," he added.

The publisher had decided to license the engine for its whole portfolio as a cost-cutting measure. The intent was to allow Midway studios to share resources more efficiently, but instead individual projects demanded adapting the engine to their needs.

The tweaks not only negated the supposed benefits of the license, but their complexity caused a host of delays for the publisher, which in turn caused financial losses.

Midway, sensing its hand was forced, then pushed out games in a desperate grab for revenue, but the games' critical and retail failures only worsened the publisher's financial problems.

A number of ex-Midway employees, when asked about the publisher's downward spiral, had a variety of answers, but almost all of them mentioned Unreal Engine 3, the technology licensed from Epic Games that powers Gears of War.

"One issue popped up again and again: Midway's decision to license Unreal Engine and use it for ALL its games," wrote Variety's Ben Fritz of his interviews with former Midway staffers.

Epic's Gears of War 2, built on Unreal Engine 3

The technology had been licensed to give Midway a common technical base for its projects, but individual teams lacked the know-how to tweak the engine for their own purposes. "It was a ton of new technology which they just weren't capable of doing. It put all the games way behind schedule," said an anonymous ex-employee.

When those delayed games finally were released, they suffered at the hands of critics and sold poorly, forcing Midway to push bad games out the door in a desperate grab for revenue.

This isn't the first time Epic's technology has been implicated in another studio's misfortunes. Too Human developer Silicon Knights sued Epic for breach of contract over its Unreal Engine 3 license after the developer encountered a number of issues while working on the game.

The persistently-troubled publisher Midway has relieved its Chicago studio of a "small number" of employees following the completion of "two major frontline games:" Blitz: The League II and Mortal Kombat vs. DC Universe.

"As large projects are completed, it is expected for any multi-team studio to evaluate the appropriate staffing levels and team composition needed going forward," said a Midway representative to Edge.

Exact numbers were not revealed, but the rep did say that the layoffs affected "well below 10 percent of the studio population." The representative added that many of those employees were moved elsewhere within Midway, although that number also was not specified.

"No other changes are being made at this time," said the representative, signaling that there were not cancellations like the last round of Midway layoffs. In August, the publisher laid off 90 employees--around 70% of the workforce--at its Austin branch, and cancelled an unannounced game in the process.

The difficulties continue to mount for the struggling Midway, which announced massive losses this week. The company doubled its Q3 losses over the year before and lost the involvement of Shari Redstone, daughter of media mogul Sumner Redstone.

Game publisher Midway is facing yet another setback: a reported loss of $75.9 million for the July-September quarter of 2008, a massive drop from the $33 million losses in Q3 2007.

Shari Redstone, daughter of media mogul Sumner Redstone, has resigned from her position as chairperson of the board, signaling another high-profile executive departure for the embattled publisher. She leaves to focus on National Amusements, the financially-troubled owner of Midway. At the end of 2007, Midway planned a revival through "fewer, bigger, better" games and greater personal involvement on the part of Redstone.

CEO Matt Booty has been confirmed as the company's chief executive going forward, after serving several months in an interim position.

The publisher's losses add to those of $30-million-plus losses in Q1 and Q2 of this year. Meanwhile, its workforce is set to be slashed by 10%, and massive layoffs at the company's Austin offices carried out in Q3 contributed to that goal.

Industry analyst Michael Pachter found that despite Midway's problems, the company may well survive and return to profitability. "Notwithstanding the continued restructuring theme and likely delay of a return to profitability by another year, we remain cautiously optimistic that Midway will perform better in 2009 than it is expected to perform in 2008," said Pachter in a Gamasutra report.

Electronic Arts has confirmed that its urban basketball series NBA Street is now on hold, with rumors suggesting that Midway's NBA Ballers franchise has been halted.

"We'll still do traditional sports, but we're going to do them a different way," EA Sports president Peter Moore explained to ESPN. "In the old days we had things like SSX that were our own intellectual property, but since then we've kind of moved away from that. We need a mixture of experiences that are not only for the hardcore."

"If Wii Sports has taught us anything, it's that people will sit there and play big head tennis all day long," he explained. "We need to have something for that sports fan who might not necessarily be a sports gamer, but who wants that 15-minute... Read more

Now available for download at FileShack is a free PC edition of The Suffering, Surreal Software's 2004 prison-themed survival-horror action game.

Now supported by advertising, publisher Midway's release of the game is meant to help promote the upcoming feature film of the same name.

Publisher Midway has laid off 90 of its Austin studio's 130 employees and cancelled an unannounced project in development, the developer announced today.

The layoffs were part of a "strategic workforce reduction" enacted by the troubled publisher, which will see a cut of about 10% of the company's global workforce. Interim CEO Matt Booty expressed remorse over the reduction.

"While this was a very difficult decision, we feel it was the right thing to do for the future of Midway," Booty said. "We view every game as an investment that must meet certain standards for quality, scheduling, and profitability."

While Booty did not specify which title was axed, sources within the company told Kotaku that the cancelled game was Criminal, an open-world crime effort in development at Midway's Austin branch.

Midway had announced in October of last year that it was developing two "ambitious open-world games." The first of the two was eventually revealed as Surreal... Read more