Sumner Redstone intends to acquire mid-size vidgame publisher Midway Games and grow the company into a major player through an infusion of creative talent.
Redstone officially revealed his intentions in an SEC filing Tuesday and discussed plans for the “Mortal Kombat” publisher at the Milken Institute Global Conference on Wednesday.
Exec and his company National Amusements have been buying shares in Midway since 1998 and rapidly accelerated their pace since December, fueling speculation of a takeover.
Due to the long period of the share purchases, the total price he will have paid is unclear, but the SEC filing indicates that Redstone will take at least 60% of Midway’s stock, making his holdings worth approximately $293 million at the most recent share price.
Although Midway will officially not be owned by Viacom, a common chairman will surely give the publisher more direct access to Paramount and CBS properties and vice-versa.
That makes the deal the closest any media conglom has come to acquiring a major videogame publisher. Most have stuck to licensing their properties to other publishers, although Warner Bros. recently launched a small in-house interactive unit, and Universal and NBC will retain a first-look deal with Vivendi-owned VU Games once the GE acquisition is complete.
“Midway is clearly a second-tier producer, but it has the potential to be in the first tier, and that’s what attracted me to the company,” the Viacom chairman-CEO said. “You’re going to see an enormous infusion of talent in the very near future.”
Redstone made clear, however, that he has no intentions of selling Midway to Viacom in the foreseeable future. “This is not a Viacom agenda,” he said.
The media mogul instead insisted he hopes to invest in higher quality developers and other creative people to work at Midway and make it a competitor with the industry’s biggest players.
After initial success several years ago with “Mortal Kombat,” Midway has failed to post a profit for the last four years. Although recent releases “The Suffering” and “NBA Ballers” were its biggest hits in a while, the company still reported a net loss of more than $20 million in the first quarter.
Shares in Midway fell nearly 10% Wednesday, closing at $8.74.