Cash-strapped Midway Games couldn’t fight the financial realities any longer, announcing on Thursday (Feb. 12, 2009) it is filing Chapter 11 bankruptcy. The move became a foregone conclusion when Sumner Redstone, who had kept the company afloat with his fortune, ran into financial trouble and had to sell his controlling interest for $100,000 to investor Mark Thomas.

That move triggered clauses in Midway’s debt agreements that allowed its noteholders to demand payment now. Midway doesn’t have the money, making it necessary to file for bankruptcy. The company has $240 million but a market valuation of only $14.8 million. I’m no financial wizard, but none of that is good.

A group of Midway bondholders filed an objection to the bankruptcy proceedings on Friday (February13, 2009)…

Every day we report on financial problems in the game industry and few companies are having a tougher go of it than well-known publisher THQ, posting a $115 million loss for its second fiscal quarter ending September 2008.

Now THQ has announced a “restructuring,” aka corporate speak for layoffs, in its mobile entertainment division. Sure enough, Gamasutra reports that the publisher will layoff 100 people.

The restructured mobile entertainment division will focus solely on…

Developer Sensory Sweep (Jackass: The Game and The Tale of Despereaux) stood accused of not paying its 200 employees since October 2008, leading the Department of Labor to get involved and resolve the issue. Now Kotaku reports current and former employees are to be paid through a consent injunction ordered by a federal judge.

Under that agreement, Sensory Sweep must place two-thirds of the proceeds from shipping a game to a publisher into an account used to pay…

With retailer Circuit City giving up the ghost, The Ledger’s Kyle Kennedy decided to check out some of their game clearance items and came away less than impressed.

Likewise, I went to my local Circuit City and realized quickly why I have never purchased a game there. A large number of the games are so overpriced a 10 percent discount is still a ripoff. I found Ninja Gaiden II still going for $39.99 at Circuit City, a full $10 above competitors…

Reuters is reporting that Sony expects to post its first loss in 14 years and it is a whopper. The company expects to lose some $2.9 billion (yes, billion with a “B,” folks) for the year. That’s going to call for huge cost-cutting measures including restructuring.

Sony needs to cut costs by 250 billion yen (approximately US$2.82 billion) by March 2010 and as part of the changes one plant in Japan will end TV manufacturing and design and a worldwide reduction in…