Mad Catz announced that they have filed for chapter 7 bankruptcy. The company is no longer able to stand on its own and they’re closing the doors.
GamesIndustry.biz is reporting that the peripheral maker known for their Xbox, PlayStation and PC controllers and racing wheels, issued a statement to let people know that they exhausted all options before deciding to file for bankruptcy.
President and CEO Karen McGinnis explained that they had no additional “viable” alternatives, stating…
“Regrettably and notwithstanding that for a significant amount of time the Company has been actively pursuing its strategic alternatives, including various near term financing alternatives such as bank financing and equity infusions, as well as potential sales of certain assets of the Company or a sale of the Company in its entirety, the Company has been unable to find a satisfactory solution to its cash liquidity problems,”
McGinnis and the other executives of the board have already resigned from their positions.
The article outlines a list of poor decisions on Mad Catz’ behalf, with co-financing Rock Band 4 being one of the bigger recent failures the company undertook, which did not pan out for either Harmonix, the developer, or Mad Catz, the co-publisher.
They sold off their Saitek line, got de-listed from the New York Stock Exchange and neither their Joytech line nor Tritton line-up could save them.
Essentially Mad Catz banked on a bunch of business decisions that didn’t pan out, almost identical to THQ when they opted to focus on the casual audience with the uDraw peripheral that cost them about $100 million, and they barely sold anything, resulting in them losing out on $80 million in that investment, as reported by Eurogamer.
These kind of decisions have always tanked companies who no longer focus on their core audience and attempt to “broaden” the appeal of their brand by branching out into the unknown. In the case of both THQ and Mad Catz, neither of those investments paid off. In in both cases we’re seeing bankruptcy being the results of those failures.