Mad Catz may have to shut down if it is not able to generate a much higher income.
Late last month, Mad Catz was not able to pay its credit lender, Wells Fargo, the amount of money it had asked for, which gave the bank the right to call in its loan, an action that could have shut down Mad Catz. However, Wells Fargo cancelled its previous agreement with Mad Catz, and entered into a new agreement which is set to last until July 31, 2016.
Despite entering a new agreement, Mad Catz still has to deal with the fact that it has been losing money since 2011. The company recently told investors that it relies too heavily on “significant contributions from anticipated sales of products related to the Rock Band 4 video game,” and it raised concerns over how well Rock Band 4 will actually sell, saying that if it doesn’t sell well, Mad Catz may close.
Rock Band 4 is being developed by Harmonix and co-published by Mad Catz, and it set to come out on October 6 for PlayStation 4 and Xbox One.