Things are looking grim this week for long-lived gaming accessory maker Mad Catz, the company perhaps best known for making those cheap off-brand controllers you forced your younger sibling to use. Despite seeing significant sales from a publishing deal for Harmonix’s rock band 4Mad Catz announced it was laying off 37 percent of its staff amid massive financial losses and significant management restructuring.
There were indications of trouble earlier this week, when Mad Catz announced that longtime president and CEO Darren Richardson was stepping down, alongside SVP of Business Affairs Whitney Peterson. Then came the real bad news last night in the form of the company’s quarterly report: a loss of $4.36m (£3m) for the last nine months of 2015, compared to a loss of $809,000 (£560,000) from a year earlier.
Mad Catz has been in deep financial trouble since last summer, when the company told investors it was at risk of defaulting on its debts. At the time, Mad Catz executives said they were counting on a rock band 4 publishing deal to lead to “significant growth in sales and gross profit.”
While rock band 4 pushed Mad Catz’s total sales for the holiday quarter to an all-time high of $114m (£78.8m), those sales don’t appear to be generating much profit for the company. The game and the instruments produced by Mad Catz were quickly marked down in Black Friday deals, leading Mad Catz to gobble up expected profits and suggesting less than expected demand for the same basic rhythm-matching gameplay we saw for the first time nearly a decade ago. saw first.
At this point, Mad Catz hopes that those massive layoffs and significant restructuring of executive leadership “could reduce operating costs, increase efficiency, and better align the workforce with the needs of the company.” Wall Street, however, seems unconvinced; Mad Catz’s stock is currently down more than 50 percent since Feb. 4, and more than 70 percent from a recent high last November (and down more than 90 percent from an all-time high in 2011).