Midway Games Inc. (originally named Midway Manufacturing and Bally Midway, and often called simply Midway) was an American company that created video games from 1958 to 2010. Midway developed and published games in popular series such as Mortal Kombat, Rampage, Spy Hunter, NBA Jam, Cruis'n, and NFL Blitz. The company also bought the rights to games originally made by WMS Industries and Atari Games, including Defender, Joust, Robotron: 2084, Gauntlet, and the Rush series.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 founded in 1958 as Midway Manufacturing, a company that made amusement games. In 1969, Bally Manufacturing bought Midway. In 1973, Midway began creating and selling arcade video games. Midway’s first major success came in 1978 when it distributed Taito’s Space Invaders in the United States. It later licensed games from Namco, 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 home video game publishing, and Tradewest became Midway Home Entertainment in 1996. That same year, Midway offered shares to the public for the first time. In 1998, WMS sold its remaining shares in Midway. In 2000, Midway was ranked as the fourth-largest video game publisher, but it faced large financial losses and raised money through stock and debt sales. Midway stopped making arcade games 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 shares and $70 million in debt to 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 its shares and debt to Mark Thomas. A court in Chicago dismissed a lawsuit claiming Midway’s former leaders misled shareholders. In 2010, the bankruptcy court ended legal claims against Redstone and approved Midway’s plan to shut down operations. Midway stopped registering its securities with the government on June 9, 2010.
History
Midway Mfg. Co. was started in 1958 as a company that made amusement equipment. It was founded by Henry Ross and Marcine Wolverton. 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. During 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. It also sold Ms. Pac-Man in 1982. In 1982, Midway became Bally Midway Mfg. Co. after Bally combined 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 arcade manufacturing assets from Sega Electronics, which was owned by Gulf and Western Industries. This purchase also gave Midway the right to sell Sega’s arcade games in the United States for two years, including titles like 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. Williams changed the company’s name back to Midway Manufacturing. Midway moved its headquarters from Franklin Park, Illinois, to Chicago, where Williams was based. Williams also 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, remained. Williams also got the right to use the "Bally" brand for pinball games, as Bally had stopped making arcade and pinball games to focus on casinos and slot machines.
Under Williams’ ownership, Midway continued to make arcade games with the Bally/Midway label and pinball machines with the "Bally" brand. In 1991, Midway took over 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 ever. 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. This happened when 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 called Midway Home Entertainment.
In 1996, Williams made Midway’s stock available to the public. At the same time, Williams gave Midway its video game copyrights and trademarks, while Midway gave its pinball assets to Williams. In 1998, Williams gave up its 86.8% ownership of Midway to its shareholders, making Midway independent again after nearly 30 years. Midway kept Atari Games as a separate company as part of this change. Midway shared some staff and facilities with Williams for a few years but gradually stopped working closely with Williams. Over time, Midway ended most agreements with Williams and had fewer people in common on its board of directors.
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 PlayStation games from Psygnosis. 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 the company remained as an entity. 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 business. In 2003, Sumner Redstone, a major shareholder, increased his ownership of Midway to 80%.
In 2004, Midway tried to grow its business by buying several video 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, an Australian studio, which became Midway Studios—Australia. Four months later, Midway closed the 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 publish games based on Cartoon Network and Adult Swim properties. Midway was ranked as the No. 4 video game publisher by sales in 2000. It dropped to No. 19 in 2005 and 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 to fund its business. In 2007, Midway was in a legal battle with Mindshadow
Subsidiaries and studios
Midway Amusement Games, LLC, based in Chicago, Illinois, was originally the arcade division of the company, which was founded as Midway Manufacturing Company. In 2001, Happ Controls bought the parts and service assets of Midway Amusement Games. After this, Midway Amusement Games left the arcade games business, but the subsidiary continued to exist to manage its intellectual properties, including the libraries of Midway, Bally, and Williams. Some former employees, including Eugene Jarvis, later formed a new company called Raw Thrills in the same year.
Midway Home Entertainment, located in San Diego, California, was founded in 1985 as Tradewest in Corsicana, Texas. In 1987, Tradewest acquired Cinematronics in San Diego and renamed it as a subsidiary called the Leland Corporation. In 1994, Tradewest was bought by WMS Industries to enter the home console market. Before this, home versions of Midway games were published by Acclaim Entertainment or other companies. In 1996, Tradewest was renamed Williams Entertainment, Inc., and later became Midway Home Entertainment. In 2001, the offices in Texas and San Diego were combined. Midway Home Entertainment published and marketed all Midway video games for home consoles.
Midway Games Ltd., based in London, United Kingdom, was responsible for publishing and distributing 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, these companies were combined to form a new holding company called Spiess Media Holding UG. The London and Paris offices were later merged and rebranded as Tradewest Games.
Midway Games SAS, located in Paris, published and distributed Midway video games in France. On August 19, 2009, Midway Games SAS was sold to Martin Spiess along with Midway Games Ltd. These companies were combined into Spiess Media Holding UG and later merged with the London office, becoming Tradewest Games.
Midway Germany GmbH, based in Munich, published and distributed Midway video games in Germany. This subsidiary was created in February 2005 by Midway Games Ltd. In August 2009, Midway Germany GmbH was sold to a company owned by Uwe Fürstenberg, a former manager of Midway.
Midway Studios Chicago was the original arcade development studio of Midway and was located in the same building as Midway Amusement Games in Chicago. After Midway left the arcade business in 2001, the studio focused on creating games for home and portable consoles. It developed games such as Blitz: The League for the PlayStation 2 and Xbox, and Stranglehold for the PlayStation 3, Xbox 360, and PC. It also continued overseeing the Mortal Kombat series. In 2009, Warner Bros. acquired the studio and renamed it 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. It was the company’s first studio to develop games for home consoles. The studio created Gauntlet: Seven Sorrows and completed Rise and Fall: Civilizations at War, which was started by Stainless Steel Studios. It also 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. In July 2009, Midway announced plans to close the San Diego studio by September 2009. However, in August 2009, THQ bought the studio and its assets, renaming it THQ San Diego. About 40% of the employees were offered new positions. THQ later declared bankruptcy in late 2012.
Midway Games West was originally founded as Atari Games in 1984 from the arcade division of Atari Inc. It was acquired by Midway in 1996 and primarily produced arcade games. Although the studio ceased operations in 2003, Midway Games West continued to exist 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 later sold to Warner Bros. in July 2009.
Midway Studios Austin was originally founded as Inevitable Entertainment, Inc. on March 23, 2000. It 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. It was later merged with the San Diego studio.
Midway Studios Newcastle, located in Newcastle upon Tyne, England, was founded in December 1996 as Pitbull Syndicate. It was acquired by Midway in October 2005 and closed on July 14, 2009, after Midway sold its assets to Warner Bros. because no buyer was found for the studio. In 2009, some former employees of the studio formed a new company called Atomhawk Design. In 2010, game designer Robert Troughton, a founder of Pitbull Syndicate, created another company called Pitbull Studio in Newcastle.