Midway Games Inc., which was previously called Midway Manufacturing and Bally Midway, was an American company that made video games from 1958 to 2010. The company was known for creating popular game series such as Mortal Kombat, Rampage, Spy Hunter, NBA Jam, Cruis'n, and NFL Blitz. Midway also bought the rights to games originally made by WMS Industries and Atari Games, including Defender, Joust, Robotron: 2084, Gauntlet, and the Rush series.
Midway was started in 1958 as Midway Manufacturing, a company that made amusement games. In 1969, Bally Manufacturing bought Midway. In 1973, Midway began making and selling arcade video games. The company became very popular in 1978 when it distributed Taito’s Space Invaders in the United States. Midway later licensed other games, such as Galaxian (1979), Pac-Man (1980), and Galaga (1981). In 1982, Bally combined its pinball business with Midway, forming a new company called Bally Midway. In 1988, Bally sold its amusement game operations to WMS Industries, which used the name Midway for video games and the names Bally and Williams for pinball games.
In 1994, WMS bought Tradewest to manage home video game publishing itself. Tradewest later became Midway Home Entertainment in 1996, the same year Midway went public by offering its stock for sale. In 1998, WMS separated its remaining shares of Midway. Midway was the fourth-largest video game publisher in 2000 but faced large financial losses and borrowed money through stock and debt sales. Midway stopped making arcade games in 2001. Sumner Redstone, who led Viacom and CBS Corporation, increased his ownership of Midway from about 15% in 1998 to about 87% by 2007. In December 2008, Redstone sold all his Midway stock and $70 million in Midway debt to investor Mark Thomas for $100,000.
In February 2009, Midway Games entered the Chapter 11 bankruptcy process. Warner Bros. Interactive Entertainment bought most of Midway’s assets, and Midway agreed to give up its stock and debt to Mark Thomas. A court in Chicago dismissed a lawsuit claiming Midway’s former leaders misled shareholders when selling their own stock. In 2010, the bankruptcy court dismissed claims against Redstone related to the sale of Midway to Thomas and approved Midway’s plan to end its operations. Midway stopped being a publicly traded company on June 9, 2010.
History
Midway Mfg. Co. was started in 1958 by Henry Ross and Marcine Wolverton as a company that made amusement equipment. In 1969, Bally bought Midway. At that time, Bally was a major company that made slot machines. After making mechanical games like puck bowling and simulated western shootouts, Midway became one of the first American companies to make arcade video games. In the 1970s, Midway worked closely with Taito, a Japanese video game publisher. Both companies shared games with each other for sale in their countries.
Midway’s biggest success came in 1978 when it licensed and sold Taito’s important arcade game, Space Invaders, in the United States. Later, in 1980, Midway licensed and sold the U.S. version of Pac-Man by Namco, and in 1982, it released Ms. Pac-Man. In 1982, Midway became Bally Midway Mfg. Co. after Bally merged its pinball division with Midway. Three games released that year, including Satan’s Hollow, were the first to use the Bally/Midway brand. From the late 1970s through the late 1980s, Midway was the top maker of arcade video games in the United States. In 1983, Bally Midway bought Sega Electronics’ arcade manufacturing assets from Gulf and Western Industries. This gave Midway the right to sell Sega games like Astron Belt and Flicky in the United States for two years.
In 1988, Bally Midway was bought by Williams Electronics Games, a company that also made pinball games. The company’s name was changed back to Midway Manufacturing. Midway moved its headquarters from Franklin Park, Illinois, to Chicago, where Williams was based. Midway became a Delaware corporation. Although Williams kept some research and development workers from the original Midway, only two game designers, Brian Colin and Jeff Nauman, stayed. Williams also got the right to use the “Bally” brand for pinball games, as Bally had stopped making pinball and arcade games to focus on casinos and slot machines.
Under Williams’ ownership, Midway continued to make arcade games under the Bally/Midway label and pinball machines under the “Bally” brand. In 1991, Midway took over Williams’ video game division and stopped using the “Bally/Midway” label for arcade games. In 1992, Midway’s The Addams Family pinball machine became the best-selling pinball game ever. In 1996, Williams bought Time Warner Interactive, which included Atari Games. Midway changed its name to Midway Games Inc. because it started making home console games. Williams gave Midway its former home console division, Williams Entertainment, Inc., which had been known as Tradewest before Williams bought it in 1994. Midway’s original arcade division became Midway Amusement Games, and its new home division was called Midway Home Entertainment.
In 1996, Williams offered Midway stock to the public. At the same time, Williams gave Midway its video game copyrights and trademarks, while Midway gave Williams its pinball assets. In 1998, Williams gave away its 86.8% ownership of Midway to its shareholders, making Midway an independent company again after nearly 30 years. Midway kept Atari Games as a separate company. Midway shared some staff and facilities with Williams for a few years but later ended most agreements with Williams. Over time, Midway and Williams had fewer people in common on their boards of directors.
On December 22, 1999, Midway changed the name of its Atari Games subsidiary to Midway Games West, Inc. to avoid confusion with another company called Atari Interactive. In 2000, Midway’s home entertainment division bought the remaining games from Psygnosis for the PlayStation. On June 22, 2001, Midway announced it would close its arcade division because the arcade market was shrinking. Midway shut down Midway Games West in February 2003, but the company name remained. Midway lost money every year since 2000, with losses growing sharply in 2003, when it lost $115 million on sales of about $93 million. Despite these losses, Midway used stock sales, debt, and credit to fund its business. In 2003, Sumner Redstone, a major shareholder, increased his ownership to 80% of Midway’s stock.
In 2004, Midway tried to grow by buying several game development studios. It bought Surreal Software in April 2004, Inevitable Entertainment in October 2004 (which became Midway Austin), and Paradox Development in December 2004. In August 2005, Midway bought Ratbag Games in Australia, which became Midway Studios—Australia. However, four months later, Midway closed the studio, leaving its employees without jobs. In 2004 and 2005, Midway lost $20 million and $112 million, respectively. Redstone later helped elect his daughter, Shari Redstone, to Midway’s board of directors and later made her chair of the board.
On February 15, 2005, Midway signed a deal with Cartoon Network to make games based on its properties, such as those from Cartoon Network and Adult Swim. In 2000, Midway was ranked the No. 4 video game publisher by sales. By 2005, it dropped to No. 19, and by 2006, it was No. 20. In 2006 and 2007, Midway lost $77 million and $100 million, respectively. It continued to use debt and credit to stay in business. In 2007, Midway was involved in a legal dispute with Mindshadow Entertainment over the rights to the game Psi-Ops. A court ruled in Midway’s favor, finding no copyright infringement.
In March 2007, Midway signed
Subsidiaries and studios
Midway Amusement Games, LLC, located in Chicago, Illinois, was originally the arcade division of Midway Manufacturing Company. In 2001, Happ Controls purchased its parts and service assets, and Midway stopped making arcade games. The company kept the subsidiary to protect its intellectual property, including game libraries from Midway, Bally, and Williams. Some former employees, like Eugene Jarvis, later started a company called Raw Thrills in 2001.
Midway Home Entertainment, based in San Diego, California, was founded in 1985 as Tradewest in Corsicana, Texas. In 1987, Tradewest bought Cinematronics in San Diego and renamed it Leland Corporation. In 1994, WMS Industries acquired Tradewest to enter the home console market. Previously, home versions of Midway games were published by Acclaim Entertainment or others. In 1996, the company became Williams Entertainment, Inc., and later changed its name to Midway Home Entertainment. In 2001, the Texas and San Diego offices were combined. Midway Home Entertainment published and sold all Midway video games for home consoles.
Midway Games Ltd., based in London, United Kingdom, distributed Midway’s video games in the UK and Europe. On August 19, 2009, Midway Games Ltd. was sold to Martin Spiess, a former Midway executive, and merged with Midway Games SAS in Paris to form Spiess Media Holding UG. The London and Paris offices were combined and rebranded as Tradewest Games.
Midway Games SAS, located in Paris, distributed Midway’s video games in France. It was sold to Spiess in 2009 and merged with Midway Games Ltd. to form Spiess Media Holding UG. The Paris office was combined with the London office and renamed Tradewest Games.
Midway Germany GmbH, based in Munich, distributed Midway’s video games in Germany. The company was created in February 2005 by Midway Games Ltd. In August 2009, it was sold to Uwe Fürstenberg’s company, F+F Publishing GmbH.
Midway Studios Chicago was the original arcade development studio, located in the same building as Midway Amusement Games. After Midway stopped making arcade games in 2001, the studio focused on home and portable console games. It developed Blitz: The League for PlayStation 2 and Xbox, and Stranglehold for PlayStation 3, Xbox 360, and PC. It also managed the Mortal Kombat series. After Warner Bros. acquired the studio, it was renamed WB Games Chicago and later became NetherRealm Studios in 2010.
Midway Studios San Diego, a successor to Leland Corporation, was located in the same building as Midway Home Entertainment. It was the company’s first studio to make home console games. It developed Gauntlet: Seven Sorrows and completed Rise and Fall: Civilizations at War, which was started by Stainless Steel Studios. The studio also worked on games like Ready 2 Rumble Boxing, Cruis’n, TNA Impact!, and Blitz: The League II. In 2009, Midway announced plans to close the studio by September, but THQ bought it and renamed it THQ San Diego. About 40% of its employees were offered jobs. THQ later filed for bankruptcy in 2012.
Midway Games West, originally founded as Atari Games in 1984 from Atari Inc.’s arcade division, was acquired by Midway in 1996. It mainly made arcade games but stopped operating in 2003. It continued as a holding entity for copyrights and trademarks until Warner Bros. Games acquired its assets.
Surreal Software, based in Seattle, Washington, was founded in 1995. Midway acquired it in 2004, and Warner Bros. bought it in 2009.
Midway Studios Austin was founded as Inevitable Entertainment, Inc. on March 23, 2000. Midway acquired it in 2004, and the studio closed in December 2008.
Midway Studios Australia, located in Adelaide, South Australia, was founded as Ratbag Games in 1993. Midway acquired it in 2005, but the studio closed in December 2005.
Midway Studios Los Angeles, in Moorpark, California, was founded in 1994 as Paradox Development. Midway acquired it in 2004, and the studio closed in 2008, merging with the San Diego studio.
Midway Studios Newcastle, in Newcastle upon Tyne, England, was founded in December 1996 as Pitbull Syndicate. Midway acquired it in 2005, but the studio closed on July 14, 2009, after Midway sold its assets to Warner Bros. Some former employees formed Atomhawk Design in 2009. In 2010, Pitbull Studio was created in Newcastle by Robert Troughton, a founder of Pitbull Syndicate.