— Former coin-op titan Midway Games Inc. announced on Feb. 12 that it had filed for Chapter 11 reorganization for its U.S. operations. The company, which stopped making coin-op games eight years ago to focus on consumer products, blamed the filing on a change in ownership that happened last fall.
Sumner Redstone, the head of Viacom and CBS Corp., was the majority shareholder, owning 87% of Midway at the end of 2007. In December 2008, Redstone sold all his stock to a private investor for an astonishingly low $100,000, plus about $70 million of debt. Midway said the "change in ownership triggered accelerated repurchase obligations" relating to its debt, which it would be unable to payback.
Formerly known as Midway Manufacturing Co., the company’s landmark videogames included Mortal Kombat, Ms. Pac-Man, Rampage, Spy Hunter and NBA Jam, among other classics created for coin-op. It was established in 1958 as an independent manufacturer of amusement equipment, mostly mechanical novelties and puck blowers, and was acquired by Bally in 1969. In 1973, it became an early maker of arcade videogames.
The company enjoyed enormous success in 1978 when it landed the license to market the influential Space Invaders videogame in America. This was followed by the hit U.S. releases of Namco’s Pac-Man (1980) and Ms. Pac-Man (1981).
In 1981, Bally merged its pinball division with Midway to form the Bally/Midway Manufacturing division, which was purchased in 1988 by pinball company Williams Electronics Games through its holding company WMS Industries Inc. In 1996, WMS purchased Time-Warner Interactive, which included Atari Games, and the original arcade division later became Midway Amusement Games.
Midway left the pinball industry to concentrate on videogames in 1999; but in June 2001 it shut down its video arcade division, citing financial losses. As a videogame publisher in the consumer market, however, the company had never generated positive cashflow after it abandoned coin-op. It currently has $10 million in cash and $150 million in debt to creditors.
2007 On-Premise Alcohol Sales Growth Was Lowest Since 2001
NORWALK, CT — A slowdown last year in the growth of alcohol-based beverages in restaurants and bars both foreshadowed and accompanied the U.S. economic recession, according to a new report published by the Beverage Information Group.
BIG’s "Cheers On-Premise Handbook 2008" said sales of spirits, wine and beer consumed in restaurants and bars continued to climb in 2007, as they had for many years. But the rate of increase was the lowest since the previous U.S. recession back in 2001. During 2007’s third quarter, consumers began changing not only their dining-out habits, but also their on-premise drinking patterns.
For many years the adult beverage industry has claimed that American bar patrons are "drinking less but drinking better" – consuming less volume, but spending more on higher quality brands. As a result, beer has been slowly but steadily losing market share to wine and spirits.
But that trend was reversed in 2007, BIG’s figures suggest. Cost-conscious consumers cut back on their bar tabs by drinking relatively more beer and relatively less wine and spirits.
TouchTunes Offers Wireless Broadband Solution For Jukeboxes
NEW YORK CITY — Following a four-month test, a wireless broadband solution is now available for TouchTunes jukeboxes nationwide. The jukebox company is offering its solution for $10.45 a week with a two-year contract.
"We focused on offering a more flexible and cost-effective way for jukebox operators to use broadband to connect to the TouchTunes network, and now we have it," said TouchTunes senior vice-president of sales Dan McAllister. He observed that wireless services provide the benefits of hardwired connections without time-consuming, complex installation processes. On average, he added, TouchTunes jukeboxes connected by broadband earn 25% more than dialup boxes.
The TouchTunes solution installs using USB wireless modem. After the connection is made, customers can access all of the company’s products and operators can take full advantage of services. These include immediate access to hundreds of thousands of songs, enhanced promotional capabilities, myTouchTunes.com and PlayPorTT services, cashless payments, and real-time diagnostics and tech support.
In the second quarter, compliant equipment from other coin-op machine makers will be able to share the TouchTunes wireless solution.