News Archive - March, 2009
Part of Midway Filing Includes Ed Boons Compensation

According to a blog post over at Variety, part of the filings Midway submitted recently regarding compensation and incentive packages for key employees included a request to give compensation to Mortal Kombat co-creator and team lead Ed Boon for his work on Mortal Kombat vs DC Universe. From the article:

Ed Boon is the co-creator of "Mortal Kombat" and currently the lead designer for for the fighting franchise at Midway. Though he isn't mentioned by name in the bankruptcy filings, there is extensive discussion of a "key designer" who is "responsible for historically the Debtors’ most successful video game series." Later on it mentions that the series had a new release in the fourth quarter of 2009.

The series is obviously "Mortal Kombat" and the designer is Boon. In this filing, Midway is asking the bankruptcy court to approve continued payment of Boon's bonus plan in order to retain his services, which it claims is "critical to maximizing the value of one of the Debtors’ primary assets" (a.k.a. "Mortal Kombat").

Why? Well, he's in charge of making the "Mortal Kombat" games and also the guy who handles most interviews and publicity. If he were to leave, it would be yet another PR nightmare for Midway and would likely lessen the value of the franchise to a potential buyer.

So how much does Boon get for his work? Well for "performance of new release version of the Video Game in fourth quarter 2008 and first quarter 2009" -- in other words, sales of November release "Mortal Kombat vs DC Universe" in the five months when it will have achieved most of its sales -- the bonus is $900,000. In addition, Boon gets $105,000 for other revenue from the "MK" franchise (older games, movies, etc.) in those two quarters.

It should be noted that the end of the first paragraph mentions a "new release in the fourth quarter of 2009". Considering it states it in the past tense, it is almost certain that "2009" was a typo, and that the author meant "2008". There has been nothing so far to indicate the next Mortal Kombat game will be coming out this year. Despite that, some sites such as Kotaku have stated that the next game is scheduled for Q4 2009. We are getting confirmation from Midway on this matter.

In any event, this should be more evidence that Midway considers Mortal Kombat their biggest (if not only) moneymaker and is doing whatever they can to retain the services of its team lead and public face.

To read Kotaku's report on the blog post (with their own commentary), click here. To read the original Variety post, click here.

Our thanks to forum/chat member for the heads-up on this article!

UPDATE - 9:50 AM CST - We have confirmed with our sources at Midway that the "Q4 2009" date given in the Variety blog posting is a typo. While the next game is in development, Midway has not announced a release date for the next MK game and are refusing to confirm one. Therefore, Kotaku's analysis of the next game's release date is based on incorrect information, and should not be seen as accurate. Our thanks to our sources within Midway for the clarification!

UPDATE - 4:45 PM CST - The original Variety blog post has been edited to correct the typo; it now says, "Later on it mentions that the series had a new release in the fourth quarter of 2008."

Midway Incentive Plans Includes Plan to Possibly Sell Mortal Kombat

As reported earlier, Midway recently filed for Chapter 11 bankruptcy protection. Things at Midway have been known to be dire for a while, with signs including mass layoffs and Ubisoft helping publish The Wheelman. Now, Kotaku is reporting on a post made by netDockets that Midway has filed a request to the court seeking permission to implement an incentive plan for upper management employees. This incentive plan, which would be worth $3.7 million USD total, would be paid out in the event certain milestones are met. The Wheelman publishing agreement is one of the milestones. The other two milestones listed are conditional: either submit a plan for reorganization (or a plan for liquidation), or sell off the franchise assets for Mortal Kombat. From the netDockets article:

The motion describes the group of 29 eligible employees as "officers, management-level employees and other non-insider key employees." The proposed plan ties bonus payments to three designated milestones. If all milestones are met, the total bonus pool available for distribution would be $3,755,000. For each milestone payment, each employee eligible to participate in the plan would receive a set percentage of the bonus amount designated for that milestone.

...

2. Milestone: Either (i) execution of an asset purchase agreement for the sale of Midway’s Mortal Kombat franchise assets or (ii) submission by Midway of a plan of reorganization to continue as a going concern. Bonus Amount: $1,292,500.

3. Milestone: The earlier to occur of (i) confirmation of a plan of reorganization or liquidation or (ii) closing of a sale of Midway’s Mortal Kombat franchise assets. Bonus Amount: $1,965,000.

In addition, Kotaku is reporting that one of the ways Midway is seeking to raise the money for the employee incentive is to deny paid time off for laid off employees, which they had originally promised to pay. The report includes letters from Midway both announcing the payment of PTO, and a plan to deny said PTO.

It should be noted that while Midway's filing is not an absolute announcement that Mortal Kombat will be sold off, the company currently has so much debt and so little incoming capital that the chances of Midway reorganizing itself into a manner that will get it out of bankruptcy are looking increasingly dim. We'll continue to keep an eye on this story. As we learn more, we'll report it here.

To read the original netDockets report that mentioned the possible sale of MK, click here. To read Kotaku's report on the plan to deny PTO, click here.

Our thanks to forum member for the heads-up on this new development!