Midway Games

The key to success in the video game business is to produce games that are the most fun and exciting to play. This requires the creative talents of experienced game designers. Midway employs over 300 game design personnel who operate in a studio environment that encourages creativity, productivity, and cooperation. Midway believes successful games are coin-operated video games that sell at least 5,000 units and home games that sell at least 100,000 units per platform. Each of the coin-operated video games released by Midway since 1993 which has sold at least 5,000 units has gone on to sell at least 100,000 units for each major home system for which it was released. Midway Games, Inc., is one of the world's leading producers of video games. The company designs, publishes, and markets games for coin-operated arcade machines as well as for home video game consoles and personal computers. Midway has published or distributed some of the most popular games in the industry, including the "Mortal Kombat" series, "Cruisin' USA," "NBA Jam," "Defender," and "PacMan." The "Mortal Kombat" line alone has sold more than 14 million units. It has brought Midway over $1 billion and at the beginning of 1998 accounted for more than 20 percent of the company's annual revenue. In the early years of its development Midway produced games exclusively for arcades and was the number one company in the coin-op market. Through its subsidiary Midway Home Entertainment, however, it has moved aggressively into the home market. Midway makes its home games in formats compatible for all the leading game models, including the popular Nintendo 64, Sony PlayStation, and personal computers. In 1969 the Midway Manufacturing Company, a maker of amusement machines, was acquired by Bally, one of the nation's leading manufacturers of gaming pinball machines. In 1988 Bally's amusement game divisions were purchased for $8 million by its main competitor in the arcade game industry, WMS Industries of Chicago. That same year Midway Manufacturing Company was incorporated as a wholly owned subsidiary of WMS. Midway worked on some WMS pinball games, but the company primarily designed and produced video games for arcades. Video games were going through a slump as the 1980s turned to the 1990s, but the entire industry revived abruptly when Midway introduced "Mortal Kombat" in 1992. The game achieved notoriety inside and outside the gamer community when it became known that secret codes had been programmed into the game: when activated, the codes changed "Mortal Kombat" from a run-of-the-mill kick-and-punch match between mutants into a bloody battle to the death at whose conclusion the victor would rip the still-beating heart from his vanquished opponent's chest, or tear his hapless opponent's spine out and hold it triumphantly aloft, or blast his prostrate opponent to ashes. The game unleashed a debate over the effect of violent video games on children, which continued throughout the 1990s. But the immense popularity of "Mortal Kombat" guaranteed that other games would compete to outdo it in both violence and realism. The game established Midway as a major force in the video game field and provided the company with the financial resources to develop new games and eventually expand beyond the arcade market. In March 1994 Midway and Nintendo formed a 50-50 joint venture. Under its terms, Midway was to develop video games for new game machines being developed by Nintendo, among them the Nintendo 64, a home game console for which Midway agreed to develop a version of "Cruis'n USA." The agreement gave the joint venture the distribution rights for home versions of any "Cruis'n" sequels developed for coin-op machines. It also had first rights for negotiating distribution of the games Midway designed for Nintendo's next coin-operated system. As of early 1997 the joint venture had not yet released any home video games, but the deal was an early step for Midway into the blossoming hom