Midway Games Inc., which was previously called Midway Manufacturing and Bally Midway, was an American company that made video games from 1958 until 2010. The company created well-known video game series such as Mortal Kombat, Rampage, Spy Hunter, NBA Jam, Cruis'n, and NFL Blitz. Midway also gained the rights to video games originally made by WMS Industries and Atari Games, including Defender, Joust, Robotron: 2084, Gauntlet, and the Rush series.
The company was founded in 1958 as Midway Manufacturing, producing amusement games. In 1969, Bally Manufacturing bought Midway. In 1973, Midway began making and selling arcade video games. Its first major success came 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 Bally Midway. In 1988, Bally sold its amusement game operations to WMS Industries, which used the name Midway for video games and Bally and Williams for pinball.
In 1994, WMS bought Tradewest to manage its home video game publishing. In 1996, Tradewest became Midway Home Entertainment, and Midway held its first public stock sale that year. In 1998, WMS sold its remaining shares of Midway. In 2000, Midway was the fourth-largest video game publisher in the United States. However, the company faced financial difficulties, losing money each year and borrowing funds through stock and debt sales. Midway left the arcade industry in 2001. Sumner Redstone, who led Viacom and CBS Corporation, increased his ownership in Midway from about 15% in 1998 to about 87% by 2007. In December 2008, Redstone sold all his Midway stock and $70 million in debt to private investor Mark Thomas for $100,000.
In February 2009, Midway Games filed for Chapter 11 bankruptcy. Warner Bros. Interactive Entertainment bought most of Midway’s assets, and Midway agreed to give up Mark Thomas’s stock and debt. A U.S. court in Chicago dismissed a lawsuit that claimed 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 the company’s plan to end its operations. Midway stopped registering its securities with the public on June 9, 2010.
History
Midway Mfg. Co. started in 1958 as a company that made amusement equipment. Henry Ross and Marcine Wolverton founded it. In 1969, Bally bought Midway. At that time, Bally was a major company that made slot machines. For several years, Midway made mechanical arcade games like puck bowling and simulated western shoot-out games. Later, 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. In 1980, Midway licensed and sold the U.S. version of Namco’s Pac-Man. In 1982, Midway licensed Ms. Pac-Man, a follow-up to Pac-Man. That same year, 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 producer of arcade video games in the United States. In 1983, Bally Midway bought the arcade manufacturing assets of Sega Electronics from Gulf and Western Industries. This also gave Midway the right to sell Sega’s arcade games in the U.S. for two years, including Astron Belt, Flicky, Future Spy, and Up 'N Down.
In 1988, Bally Midway was bought by Williams Electronics Games, a company that made arcade and 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. Williams changed Midway into a Delaware corporation. Although Williams kept many research and development workers from the original Midway, only two game designers, Brian Colin and Jeff Nauman from Rampage, stayed with Midway. Williams also got the right to use the "Bally" brand for pinball games because Bally had stopped making arcade and pinball games to focus on casinos and slot machines.
Under Williams’ ownership, Midway continued to make arcade games using the Bally/Midway label and pinball machines using the "Bally" brand. In 1991, Midway absorbed Williams’ video game division and stopped using the "Bally/Midway" label for its arcade games. In 1992, Midway’s The Addams Family pinball machine became the best-selling pinball game of all time. In 1996, Williams bought Time Warner Interactive, which included Atari Games, originally part of Atari, Inc. Also in 1996, Midway changed its name from Midway Manufacturing to Midway Games Inc. because it entered the home console market. Williams gave Midway its former home console division, Williams Entertainment, Inc., which had been known as Tradewest before Williams bought it in 1994. The original arcade division became Midway Amusement Games, and the new home division was named Midway Home Entertainment.
In 1996, Williams made Midway’s stock 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 its remaining 86.8% ownership in 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 and had fewer shared board members.
On December 22, 1999, Midway changed the name of its Atari Games subsidiary to Midway Games West, Inc. to avoid confusion with Atari Interactive. In 2000, Midway’s home entertainment division bought the remaining games from Psygnosis for PlayStation. On June 22, 2001, Midway announced it was closing its arcade division because the arcade market was shrinking. Midway shut down Midway Games West in February 2003, but it remained as a company. Midway lost money every year since 2000, and its losses grew in 2003, when it lost $115 million on sales of about $93 million. Midway used stock and debt to fund its operations. In 2003, Sumner Redstone, a major shareholder, increased his ownership to 80% of Midway’s stock.
In 2004, Midway tried to grow its business by buying several game development studios. In April 2004, Midway bought Surreal Software in Seattle, Washington. In October 2004, it bought Inevitable Entertainment in Austin, Texas (which became Midway Austin). In December 2004, it bought Paradox Development in Moorpark, California. On August 4, 2005, Midway bought Ratbag Games in Australia, which became Midway Studios—Australia. Four months later, Midway closed the Australian studio, leaving its employees without jobs. During 2004 and 2005, Midway lost $20 million on sales of $162 million and $112 million on sales of $150 million, respectively. Redstone voted to put his daughter, Shari Redstone, on 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 Cartoon Network and Adult Swim properties. Midway was ranked as the No. 4 video game publisher in 2000 and fell to No. 20 in 2006, according to Game Developer magazine. In 2006 and 2007, Midway lost $77 million on sales of $166 million and $100 million on sales of $157 million, respectively. Midway continued to use debt and credit to fund its operations. In 2007, Midway was involved in a legal battle with Mindshadow Entertainment over the rights to the Psi-Ops video game. A court ruled in Midway’s favor, finding no evidence
Subsidiaries and studios
Midway Amusement Games, LLC, located in Chicago, Illinois, was originally the arcade division of the company, which was founded as Midway Manufacturing Company. Its parts and service assets were purchased by Happ Controls on October 1, 2001, and the company left the arcade games business. A subsidiary remained to manage intellectual properties, including the libraries of Midway, Bally, and Williams. Former employees, such as Eugene Jarvis, later formed Raw Thrills in the same year.
Midway Home Entertainment, based in San Diego, California, was founded in 1985 as Tradewest in Corsicana, Texas. It acquired San Diego-based Cinematronics in 1987 and renamed it as a subsidiary, the Leland Corporation. Tradewest was purchased by WMS Industries in 1994 to enter the home console market. Previously, home versions of Midway games were published by Acclaim Entertainment or others. The company was renamed Williams Entertainment, Inc., and later became Midway Home Entertainment in 1996. Offices in Texas and San Diego were combined in 2001. Midway Home Entertainment published and marketed all Midway video games for home consoles.
Midway Games Ltd., based in London, United Kingdom, published and distributed Midway’s video games in the UK and other European markets. On August 19, 2009, Midway Games Ltd. was sold to a company owned by Martin Spiess, a former executive of Midway. Along with Midway Games SAS in Paris, it was formed into a holding company called Spiess Media Holding UG. It was merged with the London office and rebranded as Tradewest Games.
Midway Games SAS in Paris published and distributed Midway video games in France. On August 19, 2009, Midway Games SAS was sold to Spiess, along with Midway Games Ltd., and formed into Spiess Media Holding UG. It was merged with the London office and rebranded as Tradewest Games.
Midway Germany GmbH, based in Munich, published and distributed Midway video games in Germany. The subsidiary was created in February 2005 by Midway Games Ltd. On August 2009, Midway Germany GmbH was sold to Uwe Fürstenberg’s company, F+F Publishing GmbH.
Midway Studios Chicago was the original arcade development studio of Midway, located in the same facility as Midway Amusement Games in Chicago. After the company left the arcade business 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 being acquired by Warner Bros., the studio was renamed WB Games Chicago. In June 2010, Warner Bros. rebranded it as NetherRealm Studios.
Midway Studios San Diego, a successor to the Leland Corporation, was located in the same building as Midway Home Entertainment and was the company’s first studio to develop home console games. It created Gauntlet: Seven Sorrows and completed Rise and Fall: Civilizations at War, which was started by Stainless Steel Studios. The studio worked on games such as Ready 2 Rumble Boxing, Ready 2 Rumble Boxing: Round 2, the Cruis’n series, TNA Impact!, and Blitz: The League II. Midway announced in July 2009 that it intended to close the San Diego studio by September. However, THQ bought the studio and its assets in August 2009, renamed it THQ San Diego, and offered positions to about 40% of its employees. THQ later declared bankruptcy in late 2012.
Midway Games West, originally founded as Atari Games in 1984 from the arcade division of Atari Inc., was acquired by Midway in 1996. It primarily produced arcade games. Although it ceased operations in 2003, Midway Games West remained as a holding entity for its copyrights and trademarks. Its assets are now owned by Warner Bros. Games.
Surreal Software, based in Seattle, Washington, was founded in 1995. It was acquired by Midway in 2004 and sold to Warner Bros. in July 2009.
Midway Studios Austin, originally founded as Inevitable Entertainment, Inc. on March 23, 2000, was acquired by Midway in 2004 and closed in December 2008.
Midway Studios Australia, located in Adelaide, South Australia, was founded as Ratbag Games in 1993. It was acquired by Midway on August 4, 2005, and closed four months later in December 2005.
Midway Studios Los Angeles, based in Moorpark, California, was founded in 1994 as Paradox Development. It was acquired by Midway in 2004 and closed in 2008, merging with the San Diego studio.
Midway Studios Newcastle, located in Newcastle upon Tyne, England, was founded in December 1996 as Pitbull Syndicate and acquired by Midway in October 2005. It was closed on July 14, 2009, after Midway sold its assets to Warner Bros. because no buyer was found for the studio. In 2009, former employees formed a new company called Atomhawk Design. In 2010, game designer Robert Troughton, a founder of Pitbull Syndicate, created another company, Pitbull Studio, in Newcastle.