Motorsport Games appears to be in the race for the white flag with its IndyCar license.
What I would call a particularly damning third-quarter earnings report for the company led to a number of dominoes falling.
The “British Touring Car Championship”, the “BTCC” or the “TOCA” are conspicuous by their absence in the report. This is particularly interesting given that TOCA announced the day before that it had ended its agreement with Motorsport Games, after more than three years of contract with nothing to show for it.
THE statement announcing termination is overwhelming if not short, at 206 words. It ends with these three paragraphs:
“It is with regret that TOCA now announces that it has been forced to terminate this agreement immediately, due to continued fundamental breaches of the agreement by Motorsport Games. Having been given ample latitude to rectify these contractual breaches, Motorsport Games does unfortunately failed to do so.
“In order to protect the reputation and intellectual property of BTCC, including those of its participants and partners, TOCA had no choice but to terminate the agreement and immediately withdraw all BTCC licensed rights that were provided to Motorsport Games under this agreement.
“TOCA understands that this news will be a huge disappointment to our hundreds of thousands of fans, many of whom have been eagerly awaiting the release of a new BTCC game… and we completely share this frustration, as Motorsport Games is not in able to do so. fulfill its contractual commitments.
So what does this have to do with IndyCar? Well, the next day, MG announced in its earnings report that it had closed its Australian games studio that produced its IndyCar-licensed game, while also suspending its development.
IndyCar infamously pulled out of iRacing at the end of 2022 due to its exclusivity deal with MG, with the IndyCar game due to launch in 2023. Instead, the game was delayed and now appears lost at sea.
IndyCar, unlike TOCA, has not cut its losses with the developer. MG, for the record, states in its filing that they plan to “identify opportunities to resume development of its IndyCar title elsewhere within the company following the closure of its Australian studio.”
This was not the only element of interest in this file. I’m not an accountant, but if I read this form correctly, it appears that MG has lost almost $17 million this year alone, having “approximately $1.2 million” in cash or cash equivalents by September 30.
This figure increased to $3.2 million as of October 31, thanks to the sale of the NASCAR license in October.
Yes, a month after selling its perhaps most valuable license, they only had $2 million more to show for it, in part due to burning through so much money monthly.
The best part of the entire statement comes at the end of a section titled “Selected Financial Highlights for the Three Months Ended September 30, 2023,” which really sums up how poorly managed this company is:
“Additionally, revenue for 2023 was $1.7 million, compared to $1.2 million for 2022, an improvement of $0.5 million, or 38.5 percent. which had a positive impact on the net loss. The increase in revenue is mainly explained by the exit from NASCAR Heat 5 DLC, Updated next generation carsin June 2023.”
NASCAR Heat 5of course, is a video game released in 2020 and offering Matt Kenseth, Jimmy Johnson And Clint Bowyer as regular pilots in the base game. The Next Gen Car update was a 2022 update released in June 2023.
This is not a typo. They released a 2022 DLC pack halfway through the 2023 season. For a game released in 2020, because the game they released in 2021 was in such terrible shape that they had to abandon it.
This is the main reason given to explain the 38.5% increase in their revenues from one year to the next.
I know we’re at about 600 words Inside IndyCar and there really hasn’t been much on IndyCar, but all of that has only been to illustrate how worrying the original column on this subject was in that IndyCar was making a gigantic mistake in relying on this Company.
Video games are a difficult thing to master, but it seemed like IndyCar did the right things before doing the MG deal. He had built a loyal following on iRacing, with the virtual Indianapolis 500 being a mainstay of the service in May. It’s in Forza Motorsport introduced it to new audiences who weren’t going to buy an IndyCar game or spend serious money in iRacing, but would just be willing to try their way of driving.
Originally the argument was that MG was inexperienced and couldn’t be trusted to release a game even half finished. Somehow, even that expectation seems to be out of the question. Now they can’t even release any games.
And it cost IndyCar the goodwill of the iRacing community, which they will have to rebuild once they find a way out of the MG contract. It cost IndyCar years before it could potentially bring a dedicated game to store shelves. And that makes IndyCar completely ridiculous, especially since the racing series that IndyCar executives are most jealous of, Formula 1, always seems to pick up pace with solid game titles every year.
And as with Motorsport Games, the financial data speaks for itself. I’m sure Studio 397 will find a landing spot once the cards collapse, and their Le Mans game will find a home. But it is clear that no game publisher has ever done so much damage to so many different racing series licenses. As the last to board the sinking ship, IndyCar must now find a way out safely.
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