One of Britain's most established publishing labels is confronting the possibility of going out of business.
Writing for Develop, Mastertronic boss Andy Payne has said that a meeting will be held next month in which he hopes the company's creditors will agree to new terms to enable the publisher to stay afloat.
Mastertronic first reached out to creditors “a few months back”. However, despite receiving plenty of support one creditor has gone legal, seeking repayment for a loan made in 2013. This resulted in a winding up order being served.
The company is currently in the process of trying to establish a Company Voluntary Agreement with creditors, despite a subsequent ruling in its favour regarding the renegade creditor.
“To be taken to the brink of being wound up and then suddenly told we were being granted more time, stinks of brinkmanship and it has not impressed me or my remaining team all of whom were told last week that they were under threat of redundancy,” Payne said.
A meeting with creditors will take place on August 11th. The closure of its Cambridgeshire HQ, an exit from the physical market and a 40 per cent reduction in staff is also planned.
“We knew that the business models we had been supporting were becoming unsustainable for us and some of our partners,” Payne added. “Yes, we had to ‘leave money on the table’ and walk away from some of the nonsense deals that we were offered.
“So, we decided to reduce any reliance on retail packaged goods and thus in February we parted ways with our retail sales team who set themselves up to fulfil the remaining demand from packaged goods retailers. In our opinion, the business models at retail for packaged goods are simply unsustainable for a company like Mastertronic.
“The publishing of packaged console games that we selected in the past was no longer economic – if indeed it ever was. All packaged goods console publishing involves payment in advance to platform holders and that puts a terrible pressure on anyone’s cash flow. We got caught in the cross fire of the new gen of consoles pushing the current/old gen out superfast.
“Furthermore, PC budget games are now sold online digitally, as we all know, and there is no longer a real appetite or indeed the specialist retailers who can sell PC games in sufficient volumes to keep the parties interested.”