Redstone shakes up struggling videogame co.
After years of dismal returns, Sumner Redstone is shaking up Midway Games.
Last week, the struggling vidgame publisher let go of CEO David Zucker, who has led the company since 2003, a year before Redstone become majority owner.
When he took over the company nearly four years ago, Redstone said he hoped to move Midway up from a second-tier publisher to the top of the industry.
But Midway has instead racked up huge losses of about $300 million and hasn’t seen any significant growth in its stature. Total revenue was about the same in 2007 as it was in 2004, though its net loss grew significantly.
Midway stock has fallen 79% since Redstone took over, costing the CBS and Viacom chairman, who owned 87% of its stock, more than $500 million in equity value.
Late last year, Redstone replaced chairman Kenneth Cron with his daughter Shari, who didn’t hide her displeasure with the company’s perf in a statement.
“Dynamic new leadership is needed to bring Midway to its full potential,” she said. “The board is confident that a new CEO will be selected who can fully utilize the opportunities presented by this next-generation console cycle to renew Midway’s position as a major player in the videogame industry.”
Midway has been plagued by delays and high-profile new titles that didn’t take off, such as “John Woo Presents Stranglehold.”
Publisher recently received a $90 million line of credit from Redstone-owned National Amusements.
Titles on tap for this year include actioner “Wheelman,” starring Vin Diesel; open world game “This Is Vegas”; and new basketball and wrestling games.
As the board searches for a new CEO, senior veep of worldwide studios Matthew Booty has been given the job on an interim basis.
It’s widely believed that, given its low stock price and the several well-known franchises it owns, most notably “Mortal Kombat,” Midway could become an acquisition target as the industry undergoes consolidation in the next few years.
Midway shares fell 7% on the news Thursday, closing at $2.01. (The stock market was closed on Good Friday.)