The New York City, New York-based multinational media conglomerate Time Warner, through its subsidiary, Warner Bros. Entertainment's, acquisition of most of Midway Games's assets, may be in financial trouble with American animator Don Bluth.
In the early 1980s, the El Cajon, California-based arcade game developer Cinematronics tasked Bluth and his company at the time, Bluth Group, with producing animation for Cinematronics's arcade video games Dragon's Lair and Space Ace, which were released in 1983.
The games were very successful, attracting considerable attention for the animated visuals quite unlike the simplistic graphics of other games of the era, but were criticized for their limited interactivity. The collapse of the video game industry in late 1983 and early 1984 halted production on the sequel, Dragon's Lair II: Time Warp. Cinematronics, now in debt and trying to cut its own losses, froze fees and royalties of over 3 million U.S. dollars to Bluth Group, driving the previously bankrupted company once again into bankruptcy.
Then, in 1987, the Corsicana, Texas-based video game company Tradewest acquired Cinematronics, with Tradewest renaming the company to Leland Corporation.
Tradewest was then acquired by WMS Industries (owner of the Williams Electronics and Midway Games brands) in 1999. Upon WMS Industries's acquisition of Tradewest, Tradewest was renamed to Williams Entertainment, Inc. Williams Entertainment became WMS's official division and entrance to the video game console market.
In 1996, WMS Industries was losing interest in video games and, as such, Williams Entertainment was transferred to Midway who renamed the division Midway Home Entertainment, Inc.. Like it was the case with WMS Industries, the division served as Midway's foothold to the home console market, who could now develop and publish video games in-house without having to rely on other publishers.
In the aftermath of the transfer, Midway's head office in Chicago, Illinois made the decision to shut down the Corsicana location and fired its staff in late 2002.
In February 2009, Midway Games filed in Delaware for bankruptcy. Warner Bros., the entertainment division of Time Warner, purchased most of Midway's assets.
So, what does this mean? It ultimately means that Time Warner may owe Bluth well over 3 million U.S. dollars in fees and royalties from his company's work for Cinematronics, which its entertainment subsidiary, Warner Bros., gained possession of through its acquisition of most of Midway Games's assets.
The big question is: Will Bluth ever end up seeing any of that money? Only time will tell, but with the shuttering of Midway Home Entertainment's Corsicana office, the answer may very well end up being "no."