Rock Band 4 publisher Mad Catz to lay off 37% of its workforce

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Peripheral Maker Mad Catz used to make some of the worst gaming peripherals on the planet – but that really started changing with its excellent Fight Sticks they made for Street Fighter IV. Their TE edition stick became the de facto controller for fighting game professionals and helped put Mad Catz on a better road; one that focused no quality and profitability.

In more recent times, they’ve tried their hand at publishing too. Their latest endeavour, publishing Harmonix’s Rock Band 4 and making its peripherals was a gamble that they hoped would pay out as gamers yearned for the return of the faux-plastic instrument-led rhythm music genre. It was a big risk. The genre had crumbled thanks to oversaturation, and new plastic instruments for new consoles are expensive.

The risk it seems may not have paid off. Though the game was critically lauded, and apparently had “strong sales,” it’s not sold nearly well enough to drive the company towards profitability. According to new Mad Catz CEO Karen McGinnis “… Rock Band sell-through was lower than originally forecast resulting in higher inventory balances as well as lower margins due to increased promotional activity with retailers.”

That could be because die-hards yearning for the series’ return help on to their old, still compatible hardware. It could be that gamers are more interested in learning applicable skills with teaching games akin to Ubisoft’s guitar tutor Rocksmith. Whatever the reason, it means that Mad Catz is sitting with unsold stock of its instruments.

Read  PlayStation 4 climbs back to the top of the US hardware charts

The peripheral maker and game publisher is now doing a bit of restructuring – which involves cutting 37% of its workforce.

“These changes will allow us to operate more effectively and help create an organization that is more agile, able to pursue growth and regain share in our core markets by simplifying our processes and reducing our operating costs, thus increasing our competitiveness and profitability without compromising the quality of our product offering,” says McGinnis. “This realignment of our resources will also enable us to better support strategic initiatives that will make our product slate more competitive, help us gain added consumer interest, and create sustainable shareholder value.”

Mad Catz saw some high-profile resignations just days ago, with Chairman of the Board Thomas Brown; CEO Darren Richardson; and general counsel and corporate secretary Whitney Person leaving just before the company’s third quarter financial earnings report was released.

Last Updated: January 4, 2017

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Geoffrey Tim

I'm old, grumpy and more than just a little cynical. One day, I found myself in possession of a NES, and a copy of Super Mario Bros 3. It was that game that made me realise that games were more than just toys to idly while away time - they were capable of being masterpieces. I'm here now, looking for more of those masterpieces.

  • Greylingad[CNFRMD]

    Ouch… Layoffs, no matter where they are, suck, but then again, RockBand vs Rocksmith… Especially with Rocksmith having released on the new consoles with a massive head start… Still, a very sad situation…

  • HvR

    “… Rock Band sell-through was lower than originally forecast resulting in higher inventory balances as well as lower margins due to increased promotional activity with retailers.”
    “These changes will allow us to operate more effectively and help create an organization that is more agile, able to pursue growth and regain share in our core markets by simplifying our processes and reducing our operating costs, thus increasing our competitiveness and profitability without compromising the quality of our product offering,” says McGinnis. “This realignment of our resources will also enable us to better support strategic initiatives that will make our product slate more competitive, help us gain added consumer interest, and create sustainable shareholder value.”

    Is this how CEO’s try to justify their inflated salalries?

    Turn “We are not making enough money from Rock Band so we need to lay off people to stay profitable” into the above?

    • Greylingad[CNFRMD]

      Yep, that’s how they do it…Yet the biggest losses in a company is usually the directorial board, rather than the workforce…

  • DragonSpirit009

    I feel their pain!

    • Aww man that sucks, sorry to hear that. Hope you get the best freaking job in the world next 🙂

      • DragonSpirit009

        Thanks… but from the news I just got my job is safe for now. Someone volunteered to early retirement. But this means one less person and more work for the rest of us

        • HvR

          Eish been there done that. Some advice polish off the CV and start looking around to make the shift sooner rather than later.

          These tend to come in waves one after another until the company starts recovering properly or when the bosses start cutting their losses usually leaving the workers up stink creek.

    • Greylingad[CNFRMD]

      Dammit man… Good luck, news like that deserves a beer…

      • DragonSpirit009

        Thanks but so far I’m good. Thou I have a lot less hair now

  • I have a RAT3… This makes me sad.

  • Darren Peach

    Wonder if that Tony Hawk Skateboard controler did any good ? Not related.

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