Mad Catz lays off 37% following reports of underperforming Rock Band 4 [Update]

Mad Catz is in a strange place, as its seen its sales increase since last year, but because it produced too much Rock Band 4 hardware, the company is now finding itself with tremendous losses.

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Update: The layoff figure was originally posted at 63 percent. However, the language of the earnings report ("The plan consists of a reduction in the number of positions across the organization equal to approximately 37% of the total workforce and includes changes at the executive level.") indicates that the reduction figure is actually 37 percent. The headline has been updated to reflect this.

Original story: After most of its executive board abruptly resigned yesterday, the gaming world braced itself for the worst from game publisher/hardware manufacturer Mad Catz. And as expected, the news coming out of today's third quarter earnings report was not good. So the hammer has fallen on a large chunk of the company, with reports coming in that 63 percent of its workforce has been laid off.

Gamasutra has issued the report on Mad Catz's mass layoffs, citing that the company is aiming for a massive restructuring plan. Mad Catz is currently in the midst of a big hardware push, as it prepares to release new arcade sticks for next week's Street Fighter V.

However, the massive losses undergone in Q3 can largely be attributed to underperforming sales from Rock Band 4, which the company took a chance on publishing late last year. The company's sales have actually improved 114 percent year-on-year, but there's a big problem in regards to the overmanufacturing of both the software and the substantially expensive hardware. Because RB4 sold relatively poorly, retailers have been desperate to get rid of the excess inventory that's eating up precious real estate on sales floors. That has led to substantial discounts and, as a result, has eaten away at any profits, taking Mad Catz deep into the red.

The low Q3 numbers are also being attributed to low demand for audio and PC hardware in both European and Asian markets.

Senior Editor

Ozzie has been playing video games since picking up his first NES controller at age 5. He has been into games ever since, only briefly stepping away during his college years. But he was pulled back in after spending years in QA circles for both THQ and Activision, mostly spending time helping to push forward the Guitar Hero series at its peak. Ozzie has become a big fan of platformers, puzzle games, shooters, and RPGs, just to name a few genres, but he’s also a huge sucker for anything with a good, compelling narrative behind it. Because what are video games if you can't enjoy a good story with a fresh Cherry Coke?

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  • reply
    February 9, 2016 2:01 PM

    Ozzie Mejia posted a new article, Mad Catz lays off 63% following reports of underperforming Rock Band 4

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      February 9, 2016 2:02 PM

      Oh damn. I guess that's the end of them.

      I had a few of their Xbox controllers.

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      February 9, 2016 2:18 PM

      Crazy. They own Saitek, which has the StarCitizen controller on the horizon. I wonder what's going to happen to that product as well as Saitek's future.

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        February 9, 2016 3:00 PM

        It's been a while since I've looked at the Saitek SC controllers, but from what I remember they were just reworking already-existing products into SC-appropriate versions. Keyboards and joysticks are their bread and butter, so I assume this won't affect them as much as it looks like.

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      February 9, 2016 2:18 PM

      Wow that is a high percentage

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      February 9, 2016 2:22 PM

      plastic instruments littered all over everyones living rooms is soooo 10 years ago

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      February 9, 2016 2:28 PM

      Gone are the days of the plastic instruments.

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      February 9, 2016 2:28 PM

      Ouch. Well, RB4 was kind of a bad idea out the gate.

      I don't want any more plastic instruments. Already have two drum sets and three guitars thanks to GH world tour on PS3 and Rock Band on 360.

      I don't want to lose all my DLC I bought on 360 version when going over to PS4. May be unreasonable for me to expect DLC to transfer from XBL to PSN, but it's still a real problem and I guarantee a lot of people who went 360 last gen and PS4 this gen are in the same boat.

      I don't really want to buy a sequel that has less features than the game before it either. No keyboard support? No online multiplayer? Not to mention the set list is very sparse when it comes to metal, which was a big reason I played rock band.

      Kinda sucks that RB4 did so badly but it really didn't need to even come out.

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        February 9, 2016 2:48 PM

        We needed a new set of instruments since all our stuff was RB1, but there was no instruments only edition day one. And I wasn't going to waste my time selling the physical copy of the game.

        Then after release we saw how limited the set was and how much of a pain in the ass importing was if you had a huge collection was the icing on the cake. I wasn't impressed with how they handled Dance Central on the xbox one so we really didn't want to take a chance on it.

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        February 9, 2016 3:03 PM

        I got Rock Band 4 without reading too much into it, and I was really surprised to learn that they did not include online multiplayer this time around. It's a huge oversight, as people like me only have a friend or two over and like to fill out the band online. I was hoping that this was a serious resurgence of the genre, but this really looks like a quick cash-in opportunity that will kill the genre for good.

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      February 9, 2016 2:34 PM

      Not sure why they went All In on RB4. I was huge into RB 3 but I'm not going to buy all of those instruments again.

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        February 9, 2016 2:39 PM

        Especially because most of the user base likely already owned working instruments.

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      February 9, 2016 2:35 PM

      yeah, totally the developers fault... fuckers

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        February 9, 2016 2:44 PM

        What? Are you saying they shouldn't lay people off because the area they banked on selling the most product in is not performing well?

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      February 9, 2016 3:05 PM

      I have an own RockBand room. I do RB parties.
      I have a eDrum Kit worth a few hundred EUR, and have invested at least 1500EUR in RB. At least.
      And then they break pro drum backwards compatibility for the XbOne.

      That why I neither have RB 4 nor a XBone.

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        February 9, 2016 4:15 PM

        RB4 was hugely disappointing. Last time I played RB, it was RB3 on the 360, and I own a full fucking RB4 set.

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      February 9, 2016 3:43 PM

      awww :-(

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      February 9, 2016 4:09 PM

      What about their android console? Shouldn't it share some of the blame?

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      February 9, 2016 4:18 PM

      RB4 crashed and burned. I'd love to see the guitar hero sales numbers. That looked like the better of the two. I'm waiting for a sale so I can snag it for Xbone.

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        February 9, 2016 6:41 PM

        yah I loved RB2 & 3 a ton!! The new setlist in RB4 looked lackluster, I just couldn't be bothered to rebuy all that stuff.

        Not to mention most of the friends I used to play Rock Band & Guitar Hero with moved out of the area.

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      February 9, 2016 4:57 PM

      Noooo. I love their fighting sticks. Hope they stay in the market

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      February 9, 2016 4:58 PM

      I didn't even know there was a RB4.

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        February 9, 2016 5:13 PM

        I knew about it but had no idea it had been released yet. I might pick it up now that I know about it.

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      February 9, 2016 5:10 PM

      No MadCatz VR headset :(

      I miss the old MadCatz, whose cheap controllers weren't even good enough to slam on the pavement. Good luck to them though. They have been doing some good things these past years.

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      February 9, 2016 6:17 PM

      Get your saitek hotas' (with all the already questionable quality) now, while you still can. I can see them focusing on the big volume sellers now (like cheap ass replacement controllers for the big 3 consoles).

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      February 9, 2016 6:32 PM

      The only reason I haven't bought RB4 is no ION Drum compatibility.

      Drums are what I mainly played and I'm not going back to the little plastic one, so yeah. Its ridiculous that legacy compatibility isn't allowed by MS. Even Sony managed to make PS3 sticks work for Street Fighter V on PS4

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      February 9, 2016 9:35 PM

      There's gonna be a lot of mad cats out there

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      February 10, 2016 5:53 AM

      Betting the company on a dead genre was not a smart move.

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      February 10, 2016 6:11 AM

      never got into those games. i always had the edgewise face on when i had to play during some parties. i'd rather be shit talking my friend as i was beating his character unconscious in ufc or mk or sf.

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      February 10, 2016 6:12 AM

      Mad Catz stated they were only going to produce enough instruments to cover the pre orders. Sounds like they did not follow that original plan and started putting shit on shelves in brick and mortars. Exactly what they said they were going to avoid this time around to incur losses.