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Midway Games fought the good fight, twice extending debt repayment deadlines, but ultimately extensions weren’t a solution. With time again running out, today the company gave in and sought the protection of Chapter 11 bankruptcy. (The full court document is embedded below)

Midway had been under the gun since December when then majority shareholder Sumner Redstone sold off his 87.2% stake in the company.  Redstone’s firesale triggered early debt repayment clauses that put Midway on the hook for settlement of more than $150m in outstanding notes that otherwise wouldn’t have been due before 2025.

The default on those loans (which becomes automatic with bankruptcy), in turn, will trigger another $90 million in obligations to Redstone’s National Amusements that are  shared with Mark Thomas, the buyer of Redstone’s shares through a participation agreement.

Working with Lazard since November, Midway had hoped to find a way to avoid this. Click to Read More

The U.S. video game industry chalked up almost$22b in retail sales last year and is continuing to grow steadily.   In 2008,   approximately 20.7m current generation consoles were sold (NPD data).  That number may be relatively small compared to the install base for DVD players (estimated at about 87% of TV owning households in 2007 according to Nielsen), but life to date US sales of consoles as of December were above 81.6m  units (including the PS2, 38.4m, without).  No matter how you count it, that is a substantial market and a sizable number of households. 

Blockbuster in its continuing struggles to reinvent and improve its business wants to reach the gaming market more efficiently than they currently do.  To achieve that, the company announced Wednesday they’ll begin including games in their “Total Access” mail-order rental service.

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It’s now official. I’s dotted and T’s crossed on the plan.  Live Nation and Ticketmaster have agreed to merge. The official press release (PDF) was issued this morning.  Substantiating the early reports , here are the facts from the press releases and conference call:

• The companies will combine in a tax free, all stock merger with a combined enterprise value estimated at $2.5b.

• Ticketmaster will receive 1.384 shares of Live Nation for each share of Ticketmaster they own.  Pro -Forma, Live Nation shareholders will hold 49.99% of the new company. Ticketmaster will hold 50.01%.

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For a long time, Live Nation and Ticketmaster were joined at the hip.  The nation’s largest concert promoter and the nation’s largest ticket vendor formed an inseparable pair.  Then Live Nation, pursuing better margins and greater ambitions of vertical integration, decided to go it alone.  The tie was severed, with prejudice.  Live Nation began acquiring assets and partners to be more self reliant. It joined with CTS Eventim to begin selling tickets on its own. Ticketmaster spun off from its parent corporation, IAC, and tried to blaze its own path.

Now, not a month into Live Nation’s re- incarnation as both promoter and ticket vendor (ticket sales began in January), and it turns out the old pals are ready to not just rekindle their old relationship, but tie up entirely in a merger.

Last  week the Wall Street Journal discovered the two companies were in the late stage of discussions.  Widespread reports citing “sources familiar” and “inside sources” predicted a deal would hit the news wires by early Monday.    

The Monday news never came. The boards of both companies apparently met late Sunday but failed to hammer out all issues.  A second meeting on Monday afternoon is believed to have settled the remaining impasse.

At this point, there’s no official press release nor comment from the companies but reports are starting to circulate that both boards agreed unanimously.  (Details will be updated on Metue as they become available).

(UPDATE: As of Tuesday morning, the companies have now confirmed the merger and issued statements regarding the details. A full summary of the deal terms as currently announced is available here on Metue. Other details about the company can be found at the bottom of this article).

What is believed known now: Click to Read More

When Amazon launched its Kindle eBook reader in late 2007, opinions on the device ran the spectrum.  Some analysts and pundits criticized it.  To them, the execution was bad. The device was unwieldy and immature.  The market opportunity for eBooks was narrow at best.   With Kindle, they thought, Amazon was chasing rainbows.   Others looked at the vision and thought the opposite.  They projected the Kindle would be transformational.  Even with its warts, they lauded the first generation device and proclaimed it the publishing industry’s equivalent to the iPod.     

After more than a year of sales, the verdict is still out but the Kindle has proven one thing: it’s no joke.  The device has been in short supply since launch.  Customers have raved about it and thanks to Kindle, eBook sales have climbed to ten percent of Amazon’s total book sales.

This morning, Amazon rolled out the second generation. 

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In the past few years, the advent, and rapid growth, of low cost royalty-free photo licensing services like iStockphoto (dubbed “microstock” agencies) gave amateur photographers an entrance into the previously exclusive world of image sales and caused a sea change in how some large licensing businesses operate.  Undercutting pricing and pinching sales, the upstarts arguably even forced the privatization of image licensing giant, Getty Images.

Bill Gates owned Corbis came late to the game but planned to capitalize with the launch of its own microstock service, Snap Village. A beta opened to the public in June of 2007 and the site launched commercially a year later.  The idea at the start was to differentiate by offering image owners the luxury of setting their own pricing schedules (in set stops between $1 to $50).  Two years later, Snap Village has found chasing down the market leader with this approach was harder than anticipated.  

Rather than revise, Corbis will of start over – sort of.  Click to Read More

Analysts expected 19 cents per share in earnings.  They got 12 cents, and that’s not taking into account an $8.4b writedown.   So much for expectations.

Like other major media companies (Time Warner (PDF), and Disney (article) to name a pair), it’s currently a struggle to balance ad inventory against reduced spending.  In the face of this, News Corporation reported weak earnings Thursday.

In a statement Rupert Murdoch explained saying the “downturn is more severe and likely longer lasting than previously thought.”

Revenue for the company’s fiscal second quarter came in at $7.87b, down 8.4% and below Wall Street’s expected draw of $8.35 to $8.38b.  Factoring in the pre-tax onetime charge related to goodwill and intangible assets, the net loss was $6.4b, or $2.45 a share compared to net income of $832m (27 cents a share) for the same period last year.

The result was News Corps. First loss in more than three years.

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