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Majesco and its indie label Midnight City in serious trouble

Majesco and its indie label Midnight City in serious trouble

November 14, 2014 | By Christian Nutt

New Jersey-based publisher Majesco is in serious trouble. That comes from multiple SEC filings that have been published in the last week, and word from industry sources both inside and outside the company.

While Gamasutra has been unable to get our sources to go on record, they're now numerous enough that alongside the official, public information, they clearly paint a picture of a company that's facing problems.

The company has been around since 1986, and has long published games for many prominent systems, ranging from the original 2005 release of Double Fine's Psychonauts to the popular Zumba exercise games, and the Cooking Mama franchise.

Majesco filed a report with the Securities and Exchange Commission, dated November 6, which refers to layoffs at the company. It states in part that "the reduction includes development and game-testing, selling and marketing, and support personnel. We are currently not developing any significant new games for release in fiscal 2015."

The filing concludes: "we have suffered losses that raise substantial doubt about our ability to continue as a going concern. Accordingly, we are evaluating various alternatives, including reducing operating expenses and personnel costs, securing additional financing for future business activities, and other strategic alternatives including a sale or merger of our company."

Gamasutra has spoken to a laid-off Majesco staffer, and we can confirm a reduction in force at the company; however, we can also confirm that staff does remain with Majesco as of today. Others' comments confirm the substance of the SEC filing in regards to its future business prospects.

When Gamasutra attempted to contact Adam Sutton, Majesco's director of business development, we received an automated email reply that he is no longer with the company -- from a "JSutton" email address. That address could thus refer to either CEO Jesse Sutton or EVP Joseph Sutton; it's unclear which.

Gamasutra has attempted to otherwise contact Majesco by email and phone for comment but has been unable to get a reply as of press time.

Another filing, which appeared yesterday, reveals that the company has sold off its full stake in social casino studio GMS, which it established last year.

We're also hearing rumblings of trouble with Midnight City, its indie publishing label. GMS and Midnight City were Majesco's two main units in the wake of the collapse of its console game business, which largely relied on the Zumba fitness brand. Majesco discontinued its relationship with Zumba in January 2014.

Midnight City recently published Double Fine's Costume Quest 2, and has plans to bring Fullbright's Gone Home to Wii U.

In its most recent quarterly results, Majesco revealed an operating loss of $2.3 million, continuing a pattern of loss-making quarters for the company.

The company has frequently flirted with delisting from the Nasdaq stock exchange -- here's another report from 2006, one of many -- but has so far managed to hang on to its ticker, COOL.

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