Mad Catz Shares Plummet as CEO and Other Execs Leave Company

[WarMachineRhodey]

www.gamespot.com/articles/mad-catz-shares-plummet-as-ceo-and-other-execs-lea/1100-6434612/

The company announced a handful of changes to its management team and board of directors. Mad Catz president and CEO Darren Richardson has resigned from the company, effective immediately. He also loses his seat on the company's board of directors. Taking over for Richardson is Karen McGinnis, who most recently served as Mad Catz's CFO. She will fill Richard's board of directors seat.

Taking over for McGinnis as Mad Catz CFO is David McKeon, who was previously a vice president and corporate controller at the company.

Additionally, Thomas Brown (chairman of the board of directors and a member of the board's audit committee) resigned on Friday, February 5. Filling his spot as chairman is John Nyholt, who has been a director at Mad Catz since 2013.

Further still, Whitney Peterson (Mad Catz senior vice president of business affairs, general counsel, and corporate secretary) has resigned, and is replaced by Tyson Marshall, who was previously associate general counsel. In another move, Mad Catz announced that Andrew Young, formerly vice president for product development, is now Mad Catz's chief technology officer, a position it just recently created.

"We recognize the tremendous value that Thomas, Darren, and Whitney have brought to Mad Catz during their tenure and thank them for their many contributions throughout the years," McGinnis said in a statement. "Looking ahead, we are confident that we have a talented leadership team in place that will enable us to steer the company on a steady course in its operations and financial performance as we look to grow our business and reward our shareholders."

Mad Catz will report earnings for its latest financial period tomorrow, February 9, with a conference call to follow. The company didn't say why it is making these major management changes, but that may be a topic of discussion during tomorrow's briefing. We'll have more details as they're made available.

Mad Catz was founded in 1989. It creates peripherals for PC and console games, most recently launching a new line of fight sticks for the soon-to-be-released Street Fighter V. The company also co-published Rock Band 4 with developer Harmonix.

Last summer, Mad Catz management said uncertainty surrounding Rock Band 4's sales, along with a number of other factors, "raise substantial doubt about the company's ability to continue as a going concern."

[The Big Daddy C-Master]

That is certainly a huge change, would certainly love to know more of why they did it.

[WarMachineRhodey]

Well for some reason madcatz arcade sticks always seem to be out of stock. I dont know if the cause is because of slow and or terrible manufacturing procedures or if they are really that popular and just not able to keep up with demand. I dont know the sales numbers so im not sure how much arcade sticks generate revenue for them vs other products.

[The Big Daddy C-Master]

Feb 8, 2016 20:21:27 GMT -5 WarMachineRhodey said:

Well for some reason madcatz arcade sticks always seem to be out of stock. I dont know if the cause is because of slow and or terrible manufacturing procedures or if they are really that popular and just not able to keep up with demand. I dont know the sales numbers so im not sure how much arcade sticks generate revenue for them vs other products.

It makes sense that they would have less stock around the release of a new SF game or something, but not all of the time.

Maybe we'll hear more about it.

[Nyu Nozomi Hyuga]

Heres an update from Gamespot:

Mad Catz Cutting 37 Percent of Total Workforce Amid Restructuring

After announcing a major management shakeup yesterday that involved the company's CEO resigning, Mad Catz today posted earnings for the latest quarter--and they were up and down. First, Mad Catz announced a restructuring effort that includes a reduction of around 37 percent of the company's total workforce. This includes the senior management board members that recently left the company.

It is unclear at this time how many jobs are affected. We will update this post as we learn more.

In the near-future, Mad Catz said it plans to book a $3 million "restructuring charge" for its upcoming quarter that is mostly made up of severance pay and benefits given to terminated employees. The headcount reduction should be mostly complete by the end of the company's upcoming quarter.

When all is said and done, Mad Catz said the move should save the company around $5 million per year.

New Mad Catz CEO Karen McGinnis said she believes the restructuring effort should "enable Mad Catz to be more competitive and increase our focus on operational, technological, and commercial actions that will help us achieve our long-term vision."

More from her statement follows:

"These changes will allow us to operate more effectively and help create an organization that is more agile, able to pursue growth and regain share in our core markets by simplifying our processes and reducing our operating costs, thus increasing our competitiveness and profitability without compromising the quality of our product offering. This realignment of our resources will also enable us to better support strategic initiatives that will make our product slate more competitive, help us gain added consumer interest, and create sustainable shareholder value."

In terms of business performance, for the holiday quarter ended December 31, net sales jumped 114 percent to $65 million, representing Mad Catz's second highest quarterly sales period in its 26-year history. Sales growth was led by a massive 391 percent increase in revenue from the Americas, but offset by a 6 percent decrease from EMEA regions and a 56 percent drop from APAC countries.

Overall, Mad Catz posted a profit of $1.2 million, down 10 percent from $1.4 million last year.

McGinnis, who took on that role just a day ago, said quarterly sales growth was driven by "strong Rock Band 4 sales," but offset in part by the "continuing softness" of the company's audio and PC gaming products.

The company is a co-publisher of Rock Band 4 alongside developer Harmonix.

Although Rock Band 4 performed well, sell-through was "lower than originally forecast." This resulted in "higher inventory balances as well as lower margins due to increased promotional activity with retailers," McGinnis said. She went on to say that a "competing product" impacted Rock Band 4's sales, most likely a reference to Guitar Hero Live.

She also stressed that Rock Band 4 is a "multiple-year product" that Mad Catz will continue to invest in and support. Additionally, she noted how Harmonix is treating Rock Band 4 as something of a platform, with new DLC released almost every week and regular content updates keeping the game fresh.

Mad Catz will hold an earnings briefing today at 2 PM PST / 5 PM EST where the company may offer additional insight into its business performance and the workforce reduction.

[The Big Daddy C-Master]

37% is a HUGE number. What's going on over there?

[magicattack]

Hopefully none of you own any stock in mad catz. I don't normally follow penny stocks, mostly because it's a giant mine field, but I saw this and what you guys were writing and I decided to look at the numbers.

Not good, in my opinion.

If someone views this as a potential turn around, I wish them well. But there is smarter places to park your money.

[The Big Daddy C-Master]

Feb 10, 2016 4:53:16 GMT -5 magicattack said:

Hopefully none of you own any stock in mad catz. I don't normally follow penny stocks, mostly because it's a giant mine field, but I saw this and what you guys were writing and I decided to look at the numbers.

Not good, in my opinion.

If someone views this as a potential turn around, I wish them well. But there is smarter places to park your money.

No, this is a disaster. I'm hearing people talking about how some of their prices have almost doubled.

Penny stocks are very volatile and many have tried to pump and dump it in the past.

37% layoffs plus executives leaving is quite tremendous. The news just came up quickly. I see people have been dumping their shares too.

[magicattack]

The leadership leaving is a blessing for them. Hopefully the new team is a bit more competent. 

[The Big Daddy C-Master]

Feb 10, 2016 5:21:26 GMT -5 magicattack said:

The leadership leaving is a blessing for them. Hopefully the new team is a bit more competent. 

Yea I don't know what was going on over there but that's terrible. They've been bumbling on SF5 which is the peak time for them sales wise. A new batch of fighting games is big money for them. Shame to waste it.

[Nyu Nozomi Hyuga]

Details about MarkMan from Eventhubs:

Mark 'MarkMan' Julio officially parts ways with Mad Catz

Back during EVO 2015, Mark "MarkMan" Julio -- Community and Sponsorship Manager at Mad Catz -- announced his impending departure from the company.

"This is probably going to be my last EVO with Mad Catz... After I complete the Street Fighter 5 range of products and help launch them to market, I will be taking a seat back from gaming and focusing on other passions," Julio explained.

With Street Fighter 5's release now upon us, it seems that the fighting game peripheral expert has now officially parted ways with Mad Catz.

We reached out to MarkMan for further comment.

"I was let go on good terms, they knew I wanted to leave," Mark told us. "So it was just the right time. I have nothing but love for Mad Catz, and I'm proud of what we accomplished for a community that I love during my 8 years there."

MarkMan assured us that he'll still be very much involved with the fighting game community going forward. "I'm going to be working with everyone now," he said.

Last week, we learned that Mad Catz would be releasing 37% of their current workforce in an attempt to better their financial situation. Because of the company-wide restructuring, numerous high-level employees at Mad Catz have resigned, including former CEO Darren Richardson.

According to a recent Tweet from MarkMan, we can expect more information on what the future holds shortly.

media.eventhubs.com/images/2016/02/15_markman02.jpg

Whatever Mark chooses to pursue, we here at EventHubs wish him the best of luck. Thank you, MarkMan, for all you've done for the fighting game community.

[The Big Daddy C-Master]

I wonder how this will affect their other sponsorships.

[Nyu Nozomi Hyuga]

Here are expired contracts from eventhubs:

Tokido, Mago's Mad Catz sponsorship contracts expired in March; no word from peripheral maker yet on term renewals

Ever since Mad Catz's announcement earlier this year that they would be laying off 37% of their workforce, which includes former Community and Sponsorship Manager Mark "MarkMan" Julio, a lot of us in the fighting games community have been wondering about what's going to happen to the well-loved MCZ pro gamers -- MCZ|Daigo, MCZ|Tokido and MCZ|Mago.

That's been a burning question in the minds of the good folks over at Korea's Team Spiritzero as well. So after the Street Fighter 5 Crash team tournament in South Korea wrapped up, Spiritzero and gang sat the three members of Team Topanga down for a brief interview, in hopes of getting us some answers with regards to the complicated sponsor situation, and to learn a little more about the players' immediate plans.

It was a difficult topic to broach, to be sure, but Tokido and Mago clarified on the situation as best as they could. And as it turns out, at the present moment the two of them are technically no longer Mad Catz sponsored players, as their contracts had already expired in March.

Here's what the two had to say about the Mad Catz situation.








Team Spiritzero: Although this time you entered SF5 Crash as Team Topanga, is it alright if we ask you about what's going to happen between you and your sponsor Mad Catz?

Tokido: Well, I can really only speak for Mago and myself, but basically our sponsorship contracts with Mad Catz had already expired back in March.

The contract was for a one-year period, and we think at the moment they (the folks at Mad Catz) are probably still discussing over whether or not they are going to renew the contracts.

Team Spiritzero: Will you still continue to make appearances on Topanga, then?

Tokido: With regards to Topanga TV, if Toyota-san (the president of Topanga) would still have me on, I would definitely come on the show.

Team Spiritzero: What about you, Mago? Has your contract with Mad Catz expired as well?

Mago: Yes, that's correct. It's just like what Tokido said, the contractual period reached its conclusion in March. As to what we're going to do from here on out, I don't fully know yet. Maybe we'll get our contracts with Mad Catz renewed. Or maybe we'll part ways with them.

Team Spiritzero: Can the three of you (Mago, Tokido and EG|Momochi) share a little more about your plans for the immediate future?

Mago: I'll still be doing streams for a bit longer, I think. After all, Street Fighter 5 is a fairly new game that's just come out, and I think there are still a lot of people out there who are wondering about how they can improve, how to best enjoy the game. I feel like there's still quite a bit of knowledge I'd like to be able to impart to these people.

EG|Momochi Outside of my role as an EG pro gamer, I'm going to be coaching some younger players as part of a project with this company called Shinobism, and be involved in some of the company's events and activities.

Tokido: There are still many aspects of my play that I'd like to continue to polish on. I believe I'm still bad at quite a number of areas, so I'd like to work on that. I think I can't just leave things as it is.

[The Big Daddy C-Master]

Hopefully they can still get out to all of the events. I'm sure sponsors will pick them up if they haven't already.

[WarMachineRhodey]

Madcatz Tgs tournament cancelled

[The Big Daddy C-Master]

Man, things must be really bad over there.

[WarMachineRhodey]

Funny that madcatz was well alive when it was making shitty 3rd part controllers in the 90s and early 2000s then they actually get a market selling quality arcade sticks to sf4/fighting game players and they fail to meet demand with the arcade sticks being constantly out of stock and end up going broke over it.

[The Big Daddy C-Master]

Apr 15, 2016 14:49:55 GMT -5 WarMachineRhodey said:

Funny that madcatz was well alive when it was making shitty 3rd part controllers in the 90s and early 2000s then they actually get a market selling quality arcade sticks to sf4/fighting game players and they fail to meet demand with the arcade sticks being constantly out of stock and end up going broke over it.

Low quality high quantity works. McDonalds does it and so does Wally World.

[WarMachineRhodey]

Apr 15, 2016 14:59:11 GMT -5 The Big Daddy C-Master said:

Apr 15, 2016 14:49:55 GMT -5 WarMachineRhodey said:

Funny that madcatz was well alive when it was making shitty 3rd part controllers in the 90s and early 2000s then they actually get a market selling quality arcade sticks to sf4/fighting game players and they fail to meet demand with the arcade sticks being constantly out of stock and end up going broke over it.

Low quality high quantity works. McDonalds does it and so does Wally World.

Madcatz was selling the high quality product (arcade sticks) really well to the point where they were out of stock about 50-70% of the time. They had a more international presence than Hori  which seemed like it would be a huge advantage for them in the arcade stick market and they had official licencing from capcom. Although im just talking about one sector of products they produce but if my product if flying off shelves faster than i could keep producing seems like they should have done some restructuring in order to meet the demand better. 

[The Big Daddy C-Master]

That's a sad way to go out of business really. You'd think their supply would meet the demand. In most cases people can't get the demand in the first place lol.

[Nyu Nozomi Hyuga]

Here are extra details from eventhubs:

Daigo still sponsored by Mad Catz, Mago and Tokido are free agents

It has been noted by the official Mad Catz Twitter account that while Mago and Tokido are now free agents, and no longer competing under the Mad Catz name, MCZ|Daigo has been retained by the company.

What this will mean for future potential sponsorships under the Mad Catz banner is unclear, but we'd imagine both Mago and Tokido will be fairly contested by high-tier sponsors given their amazing results these last few years.

You can find the tweets confirming player status below.

[The Big Daddy C-Master]

I thought I responded to this. I would imagine they'll be picked up again. Tokido especially is a big name. That said I don't think they make much money off of any of this.

[Nyu Nozomi Hyuga]

Heres the final conclusion of Mad Catz from shoryuken:



Mad Catz has been delisted from the New York Stock Exchange

It’s no secret that peripheral maker Mad Catz has had a tough couple of years. The company has experienced a downturn in revenue recently, which has resulted in significant layoffs and restructuring last year–including letting go of most of the fighting game players that they sponsored.

It seems that the company has suffered another blow, as they have now been delisted from the New York Stock exchange due to the “abnormally low trading price” of its common stock. NYSE regulations require that a company’s stock trades at $1.00 across 30 consecutive days to remain listed in the exchange. Mad Catz stock, on the other hand, went as low as $0.06 before they were delisted.

Mad Catz made a name for itself at the turn of the decade as a producer of top-of-the-line arcade sticks. Now, while its association with the fighting game community was generally successful–with them having a heavy involvement in both sponsoring players and the Capcom Pro Tour itself–other ventures haven’t seen quite the same level of success. Their Rock Band 4 peripherals, something which the company seemingly hinged their future on, failed to stem the tide of loss and turn their fortunes around.

-------------------------------------------------------------------------------------------

Mad Catz files for bankruptcy

When it comes to arcade sticks, there’s no other peripheral company that has had a larger impact than Mad Catz. Starting with the release of their original Street Fighter IV-branded Arcade FightStick Tournament Edition, Mad Catz has been a constant presence within the fighting game community, supporting both players and events–while also providing hardware.

While Mad Catz did see success with their fighting game products, the company has struggled as of late, especially after the seeming failure of their peripheral line for Rock Band 4. They were just recently delisted from the New York Stock Exchange. Unable to recover from their financial woes, Mad Catz has now made a voluntary assignment in bankruptcy. As part of this, the company will cease operations and their entire board of directors has resigned as of March 30. PricewaterhouseCoopers has been appointed to handle Mad Catz’s assets as their trustee.

Mad Catz’s original Arcade FightStick Tournament Edition was a game-changer when it launched alongside Street Fighter IV back in 2009; prior to its release, players looking for an arcade stick with genuine arcade parts would either have to build a custom stick, or look for a rare limited-edition retail stick (HORI’s Real Arcade Pro line only had arcade-standard buttons in the limited SA and SE variants). With the release of the “TE,” companies such as HORI (and later Qanba and Razer) had to step their game up to match, and offer arcade sticks with full arcade-quality parts as standard.

This increased availability allowed for a boom in the arcade stick modding and building community. A small cottage industry sprang up around modifications for the TE–and eventually, other top-of-the-line arcade sticks as well. At the same time, custom builders–freed from having to make everyday arcade sticks–now moved on to making true “premium” sticks that are as much works of art as they are video game controllers.

In addition to this, Mad Catz was one of the first companies to start sponsoring players, including legends such as Kenryo “Mago” Hayashi, Hajime “Tokido” Taniguchi, and of course, Daigo Umehara. In addition to this, they also helped sponsor other players via other teams such as Ho Kun Xian as part of Team Desperation Move, and Ryan Hart as part of Western Wolves.