According to independent sources close to the company, publisher Midway Entertainment has announced to its staff that it will be closing both its San Diego and Australian development offices, resulting in significant layoffs.
Midway's most recent financial results
included a large quarterly loss of $29.1 million, and had predicted a financial year loss of $95 million, and the company is believed to be closing these studios in order to cut costs and better approach next-generation development.
The San Diego office of the company had recently completed Gauntlet: Seven Sorrows
for PlayStation 2 and Xbox to a mixed critical response, after losing co-leads John Romero
and J.E. Sawyer from the project earlier this year. Reports indicate that Midway have chosen to give the employees 60 days notice, attempting to relocate some to open positions at other Midway offices, rather than start a new next-generation game project from scratch.
Midway Australia, which is based in Adelaide and was formerly Ratbag Games before being acquired
by Midway only in August 2005, was working on undisclosed titles for Midway, believed to be in the racing genre that Ratbag (Dirt Track Racing
) was noted for. According to a report in the Adelaide Advertiser, Midway senior vice president Matthew Booty delivered the news to the 70 Midway Australia staff on Tuesday.
Despite the apparent layoffs, the company still owns significant internal development resources in its Chicago, Los Angeles, Seattle (Surreal Software), Austin, and Newcastle, UK (Pitbull Syndicate) operations.
Representatives from Midway had not returned Gamasutra's calls at press time, and the company has not yet made an official announcement on any development resource repositioning.