Midway Games

History

Midway Manufacturing Co. was founded on November 1, 1958, in Chicago, Illinois, by Henry Ross and Marcine Wolverton. The company began as a manufacturer of pinball machines and coin-operated amusement devices for the North American market — practical machines built for arcades, bowling alleys, and roadside diners, the kinds of businesses where the machines paid for themselves in quarters if they were entertaining enough. For its first decade Midway was a small regional player in a crowded industry, one more parts supplier and pinball manufacturer among many. That changed in 1969 when Bally Manufacturing Corporation — then the largest pinball manufacturer in the world — purchased Midway outright.

Under Bally's ownership Midway moved into interactive entertainment. In 1973 the company began licensing and distributing arcade video games from Japanese manufacturers, bringing Taito's Gun Fight (1975) and Space Invaders (1978) to North American arcades. The transition was profitable but derivative; Midway was a distributor of other people's innovations, not a creator itself. By the mid-1980s the company's relationship with Bally had deepened, and it was operating as a subsidiary responsible for Bally's arcade game operations. In 1988 Midway acquired the North American coin-operated video game assets of Williams Electronics — a storied arcade developer whose portfolio included Defender (1981), Robotron: 2084 (1982), and Joust (1982), all designed by Eugene Jarvis and his collaborators. Williams had exited the coin-op business; Midway absorbed its legacy.

In 1996 the organizational structure shifted decisively. Bally's parent company, WMS Industries, transferred Williams Electronics' video game properties to Midway and reorganized the company as Midway Games Inc., distinct from its pinball origins. The same year Midway made its initial public offering of stock. That same year WMS had acquired Time Warner Interactive, which included Atari Games; those assets were consolidated under Midway as well. By 1998 Midway separated entirely from Williams, and the Williams and Midway brands were formally split into independent entities. The combined library of Midway and Williams arcade titles — a catalogue spanning fifteen years of coin-op history — became the foundation for Midway's identity as a games publisher and brand custodian.

But before all that restructuring, Midway had made the one game for which it would never be forgotten. In 1992 programmer Ed Boon and artist John Tobias — two young developers working at Midway's Chicago studio — designed a one-on-one fighting game intended to compete with Capcom's Street Fighter II. Mortal Kombat debuted in arcades in October 1992. Instead of using hand-drawn sprites, it used digitized video footage of live actors performing martial arts in costume. Instead of abstracted cartoon punches, it depicted blood — bright red pixels that spurted from wounds with each landed hit. And instead of allowing a defeated opponent to walk away, it introduced 'fatalities': optional finishing moves in which the victor could rip out the opponent's spine, decapitate them, immolate them, or worse. The game was grotesque, it was effective, and it was an instant sensation.

Mortal Kombat's commercial success was matched only by the public backlash it triggered. The violence was impossible to ignore, and by 1993 the U.S. Congress began holding hearings on violence in video games. Senator Joseph Lieberman cited Mortal Kombat by name during his opening remarks, describing it as a game that rewarded players for ripping out an opponent's heart. Sega and Nintendo were called to testify. The industry's response was to create the Entertainment Software Rating Board (ESRB) in 1994, the first standardized content rating system for video games sold in North America. Mortal Kombat had forced an entire industry to define what was permissible and what was not — a threshold it had crossed deliberately.

Mortal Kombat II (1993) refined the formula and became one of the highest-grossing arcade games of its decade. Midway followed with Mortal Kombat 3 (1995), Ultimate Mortal Kombat 3 (1995), Mortal Kombat Trilogy (1996), and Mortal Kombat 4 (1997), sustaining the series through the arcade era and into the home console market. In parallel, Midway developed NBA Jam (1993), an over-the-top basketball game with exaggerated physics, flaming basketballs, and commentary by Tim Kitzrow. The game was developed concurrently with Mortal Kombat II using the same T-Unit arcade hardware that Midway had created for Mortal Kombat. NBA Jam became one of the most successful arcade sports titles of the 1990s; early builds even included secret playable characters from Mortal Kombat, though the NBA rejected the crossover due to Mortal Kombat's controversial reputation.

The arcade industry's commercial decline in the 2000s took Midway with it. The company exited coin-operated game production in 2001, pivoting entirely to console and PC development. That shift came too late and without a strong enough catalogue to sustain profitability. Midway's home console releases underperformed; its debts accumulated. On February 12, 2009, Midway Games Inc. filed for Chapter 11 bankruptcy protection in Delaware with liabilities exceeding assets. Warner Bros. Entertainment entered into a stalking horse asset purchase agreement in May, offering $33 million for substantially all of Midway's U.S. assets including the Mortal Kombat franchise and development studios in Chicago and Seattle. No competing bids were placed. On July 1, 2009, a bankruptcy court approved the sale. Midway's catalogue, its studios, and its legacy passed into Warner's ownership. The company that had helped define arcade gaming in America — and had drawn the first regulatory line around video game violence — closed after fifty-one years.