California-based company Mad Catz is best known for producing a large variety of gaming peripherals and accessories over the years, but took a larger stab at software production by helping Harmonix co-distribute Rock Band 4 last year, putting a large investment into producing new instrument controllers as well as promoting the title.
While the game received a generally positive critical reception, it seems that overall sales didn’t meet Mad Catz’s expectations, and the company will consequently go through a major restructuring over the next fiscal year.
A whopping 37% of Mad Catz’s staff will be let go in the process, which is expected to save the company $5 million by 2017. While the past quarter’s total sales of $65 million were the second-highest the company has ever had, a significant decrease in net income resulted in a loss of over $4 million.
Darren Richardson, the company’s president and CEO, stepped down from his position the day before this news dropped. His replacement, Karen McGinnis, has stated that Rock Band 4 still experienced ‘strong’ sales overall, and cited ‘continuing softness’ in the PC gaming and audio device markets as additional reasons for the financial loss.
McGinnis offered further details in the press statement below:
“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. Looking ahead, we are confident in our ability to further monetize our diverse range of products and are focused on updating and improving many of our product offerings to better leverage the opportunities we see ahead.”
Confirmations of gaming company layoffs are always sad to hear, and this is no exception. Hopefully the employees Mad Catz chooses to terminate can quickly find other work.