Midway&#39s next generation

Could you explain what Martin’s recent change of role will entail, and what it means for the European market’s relationship with you?

Martin Spiess:

You’ll have to ask Matt. After all, he promoted me…

Matt Booty:

We would really like for Martin to get more involved worldwide – not just Europe and the UK. That would include Asia and Australia and basically all the emerging markets.

MS:

I was already geared up when I started with Midway. So I think we’re in good shape.

Matt, you’ve taken over as interim CEO. Is there any news on whether that will become a more permanent thing?

MB:

I personally don’t have any visibility into that, but I work for our Board of directors and trust that they’re working hard to pick the person who is right for Midway. Rather than focus on that, I’m more focused on whether our 2008 games are set for success and not be too concerned over how long the interim period will be. I know when we get our schedule set up for ’08, we’ll start to think about what makes most sense for the company either during or after the transition.

If there was a permanent role offered, would you be interested?

MB:

Oh, absolutely. I definitely would.

You had quite healthy revenue for your last financial year, which you revealed in March – but losses were less impressive. What was the main issue, and how can you make sure that those losses are reduced?

MB:

The focus is on the games. If we get our quality games at the right time and have them well marketed, the revenues will take care of themselves. We’re well funded and the revenue will come from the games. We have to focus on that first.

MS: We have invested in previous years pretty heavily in order to deliver the first set of our next generation games.

Now we are in a position to make games with a more reasonable price tag. As you know, our main mission is to deliver highest customer value to our consumer and make a decent profit along the way. We are now in a much much better shape to do it. More co-ordinated launches will help us. TNA will be the first time we can see the fruits of that tactic. That will be day and date across all formats worldwide – a first for us. This is going to be a very successful strategy for us.

You announced that you’d taken a $90 million dollar credit agreement with National Amusements – how will that money be spent?

MB:

To clear that up, it’s a credit facility, which makes the money available to us as and when we need it. So, we are funded for all of our operations through 2008, we ended last year with a substantial amount of money still on the books.

But as you know, the games industry is very capital intensive, and the cost of buying discs and everything is significant. This basically gives us the operating capital we need to get through the rest of the year. We’ll turn to it as we need to going forward.

Stranglehold did particularly well in Europe last year. Can you see it being a franchise that you’ll continue with?

MS:

That’s actually a discussion we’re having internally right now. I think we have built a great level of brand equity with Stranglehold and that’s something we shouldn’t give up on. We are looking into various possibilities in order to sequelise the franchise. News will be announced soon in regards to it.

You’re planning to announce a lot of news at E3, but there’s some confusion about the show amongst the European trade. Do you view it purely as a US show or a global one?

MB:

It’s not as important for us to worry about what the event might end up being. That’s out of our control. It’s more about getting our PR and marketing group to capatilise on whatever it is. We have to make sure we’re at E3. It will always remain a great place to announce information on upcoming games.

MS:

From a timing standpoint, it’s important we have a show a little earlier in the year than Leipzig, which is a bit late at the end of August. In July, you can get retail geared up a lot better for your games. At Leipzig, it’s almost too late for selling the product in.

What about Cannes’ IDEF show?

MS:

We are supporting Cannes quite a bit – especially for southern European territories. It’s very important for France, Spain, Italy, Beneleux and the Nordic territories. But quite honestly, for UK retail, it’s not that important. For those guys, Leipzig is the better platform.

For your bigger titles over the last fiscal year, Europe took 40 to 50 per cent of all revenues. Is that a good sign or a bad one for Midway?

MB:

I think it’s a fantastic sign. Martin and his team have done a tremendous job of growing our revenues in Europe, and it’s a place where going back a few years Midway was not executing well or making the most of. We’re more than happy to see that revenue grow.

MS:

It’s a combination of our organisation being a lot more professional than it was a few years ago and the product having more global appeal than it did before. There’s less Americanised product and a more professional team: that’s how we grew the market share.

MB:

We put a lot of emphasis on getting our teams working well on the product side with our studio in Newcastle. I believe our international and UK teams are better than any I’ve seen before.

Are you looking at studio acquisitions – or even publisher mergers?

MS:

Yes. I can’t reveal details, but we’re currently considering both publisher and studio acquisitions. We’re always looking at opportunities.

To flip the question round, what’s your thinking on someone coming in with a bid for Midway – or Shari and Sumner Redstone working to take you inside Viacom?

MB:

I think Midway is a strong entity for them, and it strategically fits in with their overall plan. But for any details beyond that, you’d have to ask them.

During Matt’s Gamers’ Day presentation, you talked about a solid plan to take Midway back to profitability. Is there any timescale you could put on that?

MB:

As soon as possible. Please write that in bold letters: As soon as possible. I think it’s important to not get ahead of ourselves. That might have been a problem before. Profitability will come from good games.

To my mind it’s important we make sure our teams have everything they need to get the games done and done well. If they’re then well marketed and well launched, they’ll take care of themselves.

Do you think DC Universe could boost Mortal Kombat sales back to its mid-90’s peak?

MB:

We’re very excited about bringing these two worlds together – both in terms of the audience and that it will open the game up to a whole new range of players. All the fans from the DC comics universe will be brought on board. DC Comics has been wonderful to work with. The writers worked so closely with the team to integrate the characters. This is not going to be two things slammed together, but a really immersive, innovative storyline.

MS:

It broadens the appeal, but also lowers the age bracket. It will be a 16-rated product. With an 18-rated product, we have certain issues placing it – especially in certain territories in Europe. This is a great opportunity to broaden that market.

Do you think the Unreal Engine-powered games you’re producing could be the best we’ve ever seen?

MB:

Midway took a pretty significant risk moving forward with a number of games that are not first-person shooters, which is obviously what Unreal is geared towards.

We have a 60 frames per second fighting game, as well as massive open world games, with interiors and driving. This is a combination of our deep partnership with Epic, as well as all the work our engineers have done to build on that. The seeds we planted a few years ago to branch out that engine into other game types are really starting to come to fruition.

The benefit we’re seeing is that we have teams across studios that can work together to help finish games, as well as sharing technology and assets. I would go so far as to say that our TNA Wrestling game and our Mortal Kombat title are the only 60-frames-per-second fighting-style action games out there leveraging the Unreal Engine.

How will This Is Vegas compare to the likes of GTA and titles that have been influenced by Rockstar’s title?

MS:

We have taken open-world gaming to the next level. All the things you want to do in a GTA kind of game but can’t – like walking through a building and everything – you can actually do in This is Vegas. You can use the slot machine, go into a nightclub and do things you always wanted to. You can experience something completely new. That’s the superior level we’ve taken these open-world video games to.

Are you being at all influenced by what’s going on with Activision-Blizzard and EA/Take Two?

MB:

Again, for Midway right now, the most important thing for us to do is focus on our games. We have a tremendously strong product development crew, we have marketing, PR and sales teams that are working together really well. We need to take care for those assets, put out some great games.

All the other stuff – mergers, acquisitions, buyouts – happen as a result of great product. My personal focus is on setting us up to deliver that product. The rest will take care of itself.