Master of The Free World Productions | Jumpcut Entertainment Network

Mad Catz Reports Debt Warning And Secures Additional Credit To Ship Rock Band

Mad Catz has reported that the opinion letter for its independent audit carries concerns over the company’s ability to pay its debts. An audit opinion letter, a document prepared by the independent auditor as a narrative accompaniment to the financial assessment, includes what is known as a “going concern” note.

This happens when a company is at risk of defaulting on its debt obligations. Mad Catz’s 2016 success hinges on the performance of Rock Band 4 (via co-publishing agreement with Harmonix), according to form 10-K filed with the SEC on June 25.

The Company depends upon the availability of capital under the Credit Facility to finance operations. Compliance with the Adjusted EBITDA covenants in fiscal 2016, which are tied closely to our internal forecasts and include significant contributions from anticipated sales of products related to the Rock Band 4 video game, depends on the Company’s ability to increase net sales and gross profit considerably. 

Also, the Company operates in a rapidly evolving and often unpredictable business environment that may change the timing or amount of expected future sales and expenses. If the Company is unable to comply with the revised Adjusted EBITDA covenants contained in the Credit Facility, Wells Fargo could declare the outstanding borrowings under the facility immediately due and payable. 

If the Company needs to obtain additional funds as a result of the termination of the Credit Facility or the acceleration of amounts due thereunder, there can be no assurance that alternative financing can be obtained on substantially similar or acceptable terms, or at all. The Company’s failure to promptly obtain alternate financing could limit our ability to implement our business plan and have an immediate, severe and adverse impact on our business, results of operations, financial condition and liquidity. In the event that no alternative financing is available, the Company would be forced to drastically curtail operations, or dispose of assets, or cease operations altogether.

These uncertainties raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

In short, the statement above indicates that Mad Catz is at risk (as of the close of its last fiscal year on March 31, 2015) of failing to comply with terms of its debt funding from Wells Fargo. In the event that it falls out of compliance, the lender can immediately call due all outstanding loan amount and applicable interest. Whether that happens or not is at the lender’s discretion at that time.

Mad Catz has since secured funding that will replace its Wells Fargo credit. The company provided us with an additional statement on the matter.

“This language was added because our debt covenants are tied to our budget and, as we have stated, we are anticipating significant growth in sales and gross profit from Rock Band 4 this year.  This is great news,” Mad Catz chief financial officer Karen McGinnis tells us. “However, for KPMG, there was not enough audit evidence for them to conclude that it is probable we will make those projections since we just started taking preorders. If we don’t meet the projections, we will violate a debt covenant, which means the bank has the right to call the loan. However, we have violated debt covenants several times in the past, and Wells Fargo has always provided us with a waiver of default. Unfortunately, KPMG cannot just assume Wells Fargo will provide a waiver, which is why they were required to include this language.”

Mad Catz’s new funding amounts to $ 30 million in two pieces. One element is a $ 20 million line of credit that will increase to $ 35 million from September 1 through December 31, 2015, in order to ship Rock Band 4. The other $ 10 million is secured funding to Mad Catz Europe (a wholly-owned subsidiary). That funding is termed at three years, but can be canceled by the lender with three months notice.

Mad Catz has been running a string of operating losses, with the last postiive operating income reported for fiscal year 2011. The losses have been diminishing, but still remain. Net income was positive for the most recently completed fiscal year for the first time since 2011. 

Harmonix indicates that this presents no disruption to its plans to ship Rock Band 4 for release on October 6.


Our Take
A “going concern” note in an audit opinion letter is reason for investigation, no matter how you spin it. I'm surprised that the chief financial officer admitted that the company has entered non-compliant status "several times" in the past and based solely on lender discretion avoided the loan being called.

The reason the lender would opt to agree to a waiver is based on a belief that there is a better chance of recovering more money (preferably through the established interest agreement) by waiting to see if the company can restore compliance than calling the loan immediately.

Everything might work out for Mad Catz if Rock Band 4 meets projections. However, it is clear the company is basing much of its future and its debt position on one title. Mad Catz is counting on people buying new hardware (guitars, drums, microphones) rather than using their old equipment. It's my hope that we don't see a repeat of the THQ/uDraw situation due to a surplus inventory of new Rock Band peripherals. – The Feed

Five Special Events Going On This Independence Day

Many Americans celebrate the 4th of July with outdoor barbecues and shooting off fireworks. Although these time-honored traditions are a fun way to kick back and relax, they often distract people from an equally important activity: taking advantage of great 4th of July deals.

For those interested in spending part (or all) of this holiday gaming, we've complied a list of the most notable Independence Day events and offers related to video games.


Ever heard of Splatfest? On July 4, owners of Nintendo's popular paint-spewing shooter will separate themselves into teams based on whether they prefer cats or dogs. Nintendo first showcased Splatfest in Japan, where the company asked if users would rather eat rice or bread for breakfast. Because Splatfest functions as a recurring event, prepare to spend the entire day fighting for your favorite pet species. If you want to look cool while defending your perspective, you may need to purchase this epic Splatoon hat.

Code Name: S.T.E.A.M

Along with Splatfest comes "Independence," a tournament for Code Name: S.T.E.A.M. We praised the turn-based strategy title for its quirky set-up and engaging gameplay, but knocked the game for requiring players to sit through long enemy turns. Fortunately, Nintendo resolved this issue with a patch, thus leaving no reason not to enter the tournament. Anyone who wishes to participate in the competition has until July 6 to reach the top of the leaderboard.

Grand Theft Auto V

Grand Theft Auto V players will be able to earn double GTA$ and RP through
three patriotic jobs with names ranging from Mud, Sweat, and Gears to GTA: Land
of the Free. Gamers who insist on spending the holiday away from television and computer screens should know Rockstar Games also plans to sell limited-edition toys in stores across Los Santos and Blaine County. Fans living in that
area of the country owe it to themselves to pick up The Liberator (a monster
truck) and Sovereign (a motorcycle). More details are available at the company's blog.


Smite, a free-to-play MOBA starring gods, recently announced
an Independence Day Chest featuring Americanized skins for several deities. Among
others, Uncle Sam joins the fray as Uncle Zeus and Ra gets a makeover into
Ramerica. While this chest costs 400 gems, Developer Hi-Rez Studios also announced several free bonuses: Until Sunday, players will collect double worshippers, favor, and experience points. Head to Smite's Youtube channel for more information, or read our review to decide if this title interests you.


When we previewed Broforce last year, we laughed the entire time thanks to the game's combination of run-and-gun insanity and over-the-top patriotism. If you would like to check out this title, there's no time like the present – Devolver Digital revealed this morning that Broforce is 33% off until the end of this weekend.


Our Take:
4th of July always brings a host of fantastic deals, and this year follows suit. I'm particularly excited for Splatfest, as I always relish the opportunity to engage cat lovers in battle. – The Feed

Assembling The Perfect Terminator Game

Terminator Genisys
is now out in theaters, and like most of the video games based on the franchise,
it's not great.
However, the countless missteps in James Cameron's killer-robot series don't
change the fact that the universe is the perfect setting for an awesome game.
If I could go back in time and kill all the crappy Terminator-licensed games,
this is the dream game I'd replace them with.

Welcome To The

While the best Terminator movies take place primarily in the
present day (or the '80s/early '90s as the case may be), the hellish,
post-Judgment Day landscape has the most potential for an awesome video game. Sure,
running from a single, indestructible enemy worked for Alien:
, but wouldn't you rather face off against a variety of different
Terminators in an unending clash between humans and killer robots?

As such, my dream Terminator game would take a page from Terminator Salvation (the movie, not the
crappy licensed game), dropping players into the role of a struggling resistance
fighter (but not necessarily John Connor, since the lore is hopelessly
convoluted at this point) in a massive open world that's already been ravaged
by nuclear war. Players would explore the wasteland for resources, contact and
establish resistance outposts, and coordinate attacks on enemy bases while
(hopefully) avoiding the complete annihilation of the human race. The gameplay
would be composed primarily of first- or third-person action, but a variety of RPG
and XCOM-style strategic elements would augment the combat, such as resource
management, recruiting unique NPCs to the fight, and researching better weapons
and defensive tools from the technology recovered from fallen foes. There'd
also be plenty of firefights and Red Faction: Guerrilla-style destruction,
because at the end of the day, you can't stave off a robot apocalypse without
blowing some crap up.

Man Versus Machine
The Terminator movies are built on over-the-top action, but
beneath all the shootouts and explosions is a game of wits between the
dwindling humans and their newly sentient mechanical adversaries. Sarah and
John Connor's attempts to stay one step ahead of the machines and discover
Skynet's latest advancements added an intriguing and intellectual angle to the
stories (even if the time-traveling elements have never made a lot of sense).

Rather than telling a predetermined story via scripted
missions (like the actual Terminator Salvation game did), my dream Terminator
game would mimic this mental chess game by pitting you against a simulated
Skynet – an A.I. architect that commands its legion of Terminators and dynamically
adapts to your decisions and the changing battlefield. Like XCOM, there would
be the constant and real threat of a game-ending fail state (i.e., the
Terminators ferreting out and destroying the last remaining pockets of the
human resistance). The A.I. would not be omniscient, and would be bound by many
of the same gameplay mechanics that you are (capturing and defending resources
to grow its sphere of influence, researching and implementing upgrades to its
soldiers, etc.), effectively selling that you are matching wits against an
artificially intelligent opponent, and guaranteeing that no two playthroughs
are ever the same.

Lead The Resistance
John Connor is considered humanity's savoir in the
Terminator series, but even he can't win the war alone. As mentioned earlier, a
major component to the game would be uniting human survivors to form the
resistance. The player would establish communities at various points across the
map, which could act as safe houses (assuming they don't get discovered and
overrun by killer robots), fast-travel points, and command centers from which
to carry out missions. Like in XCOM, the human survivors you recruit would have
randomized abilities that improve over time, and could be given tasks to carry
out on their own (similar to the Assassin's Creed series) or accompany the
player during missions. Also like in XCOM, if these NPCs died, they would stay
dead, creating real consequences for your decisions and failures. It would be
up to the player to decide what type of missions to undertake. Do you try to
capture that abandoned factory in hopes of using its machinery to bolster your
ammunition production, even though it means taking on a pair of patrolling
HK-Tanks? Is it worth trying to rescue your captured scouting party from a
nearby work camp even though it means risking even more lives? Whatever you
choose, Skynet is guaranteed to react with plans of its own.

The Ultimate Ally
Ever since Terminator
, the series has toyed with the idea of humans using reprogrammed
Terminators to aid them in the fight. This component would also be implemented
in the game: Players could capture and reprogram Terminators to help defend
them in battle or carry out devastating offensive attacks. These robotic allies
would sport their own unique research tree, and could be upgraded with a
variety of different weapons and programming. However, they would also carry
their own risk, should Skynet figure out a way to reactivate them or gather
intel from their memory banks. Can you ever really trust a killer robot?

No Fate But What (You)

I saved the most ridiculous idea for last, but it's integral
to the series nonetheless: Ever since the first movie, humans and Terminators
have been traveling through time in hopes of tinkering with history enough to
give them an advantage in the future. As technically difficult as it would be
to implement, imagine how awesome it would be if you could hop back in time to
change a particularly bad outcome? The time-travel element would likely best be
limited to more scripted missions that could dynamically pop up based on the
state of the world. Perhaps you could give you scientists a head-start on
researching a powerful tool, or save your highest-ranking resistance fighter
from being retroactively offed by taking a trip back to a pre-apocalyptic L.A.?
Other time-travel missions could let you relive classic moments from the film
series or the underrated Sarah Connor
. And hell, since it's a dream game anyway, you could even do a
1:1 light-world/dark-world approach that lets you mess with time continuums on
the fly – just don't blame us if you have to bust out a box of straws to keep
track of what's going on.

What would you want to
see in a Terminator game? Share your thoughts in the comments below. – The Feed

Passing The Puck: Assassin’s Creed Creator Meets NHL’s Producer

Every year at E3, we try to connect two developers for a one-on-one conversation that viewers wouldn't expect. Even with that template in mind, we were still surprised when the creator of Assassin's Creed and founder of Panache Digital Games Patrice Désilets said that he really wanted to sit down with NHL 16's producer Sean Ramjagsingh. As Désilets points out in this year's video, sports developers are wildly under-appreciated for their effort and passion. In a side hall at E3 2015, Désilets and Ramjagsingh sat down to discuss the simple beauty of hockey, the importance of passion in game development, the balance of creativity versus mirroring reality in games, the challenges of opening a new indie studio, and much more.

Watch the video below to learn what the creative director of Assassin's Creed 1 & II and Prince of Persia: Sands of Time wants to discuss with the producer of EA's NHL series.

(Please visit the site to view this media)

Special thanks to Job and Laura of Telltale Games for the beer donation.

If you enjoy these videos of developers speaking with other developers, here are some previous entries in the series…

No Man's Sky's Sean Murray and Insomniac's Ted Price
The Creators of Tetris and the Designer of Threes
Richard Garriott, Greg Kasavin, and Felicia Day
The Walking Dead's Sean Vanaman and Peter Molyneux
Minecraft's Notch and Bethesda's Todd Howard
David Cage, Ryan Payton, and Shenmue's Yu Suzuki – The Feed

GI Show: The Halo Spectacular

Every month we roll out exclusive content on our cover story and cap it all off with a special edition podcast where we collect questions from the community and volley them at the game's developers. To wrap up our month of content covering Halo 5: Guardians coinciding with our July cover story on the game, we wanted to go above and beyond our usual and make the entire podcast episode a Halo-themed celebration.

First up, podcast hosts Ben Hanson and Tim Turi are joined by Bryan Vore and Ben Reeves to talk about their cover story trip to play exclusive content from Halo 5: Guardians at 343 Industries. In the next segment we're joined by Josh Holmes and creative director Tim Longo from 343 Industries to answer burning questions from the community like the reasons for cutting split-screen support and whether or not we'll see an appearance from the Flood. For the final segment, we're joined by designer Jaime Griesemer and composer Marty O'Donnell from Highwire Games to give us a candid account of Halo's earliest struggles of development at Bungie, including surprising stories on the origins of the Halo theme and the over-powered pistol.

There's a lot of ground to cover in this Halo Spectacular, so watch the video below or subscribe and listen to the audio on iTunes.

(Please visit the site to view this media)

To jump to a particular segment of the podcast, check out the timestamps below…

2:25: Bryan and Ben's impressions of a section of Halo 5's campaign and the Warzone multiplayer mode
15:12 – 343's Josh Holmes and Tim Longo answer questions from the community
56:02 – Highware Games' Jaime Griesemer and Marty O'Donnell talk about the early development of the Halo series

To learn more about Halo 5: Guardians, click on the banner below to enter our exclusive content-filled hub. – The Feed

Celebrate July 4th With More Free Monster Hunter 4 Ultimate DLC

If your July 4th plans include slaying some mighty beasts in
Monster Hunter 4 Ultimate, Capcom is offering up some extra goodies to aid you
in your adventures.

Previous DLC packs have included Legend
of Zelda gear
and Mario
and Sonic costumes
. The biggest addition in July? The highly coveted USJ
Star Knight equipment. However, you'll have to wait until July 17th to pick it
up, as Capcom is delivering this month's DLC extras in two parts. Altogether though, it
sounds like a good hall. Here's the rundown from Capcom:

  • 14 New
    quests (including Gold Rathian and Silver Rathalos quests)
  • 5 New weapons
  • 3 Complete armor set
  • 1 Palico weapon
  • 1 Palico armor set
  • 1 Bonus Palico: Brown Pal
  • 3 Guild Card backgrounds
  • 7 Guild Card titles

I don't play Monster Hunter 4 Ultimate, so I don't know what
half of that means, but the video below makes it all look pretty darn cool:

(Please visit the site to view this media)

The first half of this month's DLC will be available
tomorrow, July 3rd. For a rundown on how to access the content, check out Capcom
Unity's site

[Source: Capcom
] – The Feed

Reality Is Collapsing: Adam Sandler’s Pixels Gets Reimagined As A Video Game

Adam Sandler’s new video game-based film, Pixels, doesn't look great, but we're willing to give it the benefit of…actually, who are we kidding, there is a 99 percent chance that the film is going to be worse than You Don’t Mess With the Zohan. This pixelated remake of Pixels is more watchable.

GI's Mike Futter probably won't be seeing this one in the theaters, but Noober Goober Gaming's 8-bit remake looks like Oscar material in comparison. Watch the snake eat itself.

(Please visit the site to view this media)

For scientific purposes here's a look at the original trailer.

(Please visit the site to view this media) – The Feed

Reader Discussion: What Do You Want From The Final Fantasy VII Remake?

Final Fantasy VII is an old game that's getting a modern makeover, but does it need more than just a visual update? Would it be sacrilegious to change the game's combat system? How many changes are too many, and when does it stop being a remake?

Yesterday, our very own Joe Juba made some controversial opinions about Sqaure-Enix's upcoming Final Fantasy VII remake, saying that the updated game should change some of FF VII's familiar combat system, story beats, and mini games, among other things. What do you think about this? Does Final Fantasy VII need more than just a facelift? Do you think the original combat system is still fun? Does the game's story still match the new art design? Director Tetsuya Nomura has already said that the remake could deviate from the original, but what exactly would you want to see changed in the Final Fantasy reboot? – The Feed

Chris Crawford is still trying to drive interactive storytelling forward

As his latest attempt to crowdfund a storytelling game falters, Crawford says he’s now more focused on inspiring a new generation of game makers than trying to revolutionize the industry himself. …

Gamasutra News

Nintendo CEO talks NX, mobile games

Nintendo published the Q& A session from its its latest shareholders’ meeting — and having taken place after E3, where little new information was announced, it’s interesting as a glimpse of its future. …

Gamasutra News