Mad Catz’s co-publishing gamble with Rock Band 4 has resulted in a staggering loss for the hardware distributor.
For the financial year ending March 31, the publisher recorded a total operating loss of $11.6 million, a financial slump largely attributed to the “incredibly disappointing” Rock Band 4, along with Harmonix’s decision to seek out a new hardware manufacturer amid Mad Catz’s financial woes.
Having invested millions in the sequel/revival, those disappointing sales resulted in a round of layoffs at Mad Catz back in February. However, the company still presides over a stock of Rock Band 4 inventory — $8.3 million in total, which now needs to be sold by September in accordance with its deal with Harmonix.
Recounting the troubling period in a call to investors was CEO Karen McGinnis, stating that:
“Following the 2015 holiday season, Harmonix decided to take a different approach to holiday 2016, which included making changes to the hardware. After careful consideration, we informed Harmonix that Mad Catz would not invest additional development resources and tooling to design new hardware.
“As such, Harmonix decided to engage a new hardware partner, which they have the right to do based on the terms of our original contract. Our agreement with Harmonix has now been terminated.”
In light of the announcement, Mad Catz now faces a “120-day wind-down period” to ship its Rock Band 4 stock.