Mad Catz has filed for chapter 7 bankruptcy in the United States, effectively bringing an end to the company’s 28 years of providing video game products and peripherals to gamers around the world. The company officially shut down yesterday, March 30th, and have already begun the process of selling off their assets.
While bankruptcy doesn’t always spell the end of a company, in this case it does, as a chapter 7 bankruptcy is filed when the company has no intentions of reorganising or restructuring the company in order to make a comeback. In essence, Mad Catz have opted to simply call it quits.
Mad Catz had been facing financial difficulties for several months. One of the contributing factors to the company’s financial troubles was their decision to gamble on Rock Band 4 being a huge success in 2015. Their bet saw them invest a lot of money into creating and selling equipment for the game; however, for Mad Catz Rock Band 4 never took off in the way the company had expected and, crucially, needed.
It’s estimated that the decision to back Rock Band 4 cost the company $11.6, million which resulted in Mad Catz’s CEO and Chairman both resigning in February 2016 before laying off nearly 37 percent of their employees. Ever since, the company’s stock price has continued to plummet, and the company has never been able to recover.
President and Chief Executive Officer of Mad Catz Karen Mcginnis released a statement that was included in a press release announcing Mad Catz’s bankruptcy.
“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.”
She continued, “The Board of Directors and management would like to acknowledge the outstanding efforts of the Company’s employees in support of its business, especially during the time that the Company faced financial difficulties. The Company would also like to thank the vendors and professional service providers who have supported the Company’s efforts during this time.”