Gaming peripherals maker Mad Catz shuts down its business: How and why did it happened

By Kin Boon on Apr 4, 2017

Veteran gaming peripherals and hardware maker, Mad Catz, Inc. has filed for bankruptcy and shuts down its business, with all proceeds going straight to lenders as of March 30. This decision sent shockwaves to the gaming community, especially the fighting games scene considering the company sponsored plenty of top players, namely for Ultra Street Fighter IV. With that said, it seemed inevitable that Mad Catz will enter this route as they have suffered financially for months, up to the point where they got delisted from the New York Stock Exchange due to abnormally low share prices.

As much as we hate to see such disruptions to the gaming community, it’s important for us to understand the decision behind it, and hope that other relevant companies won’t suffer the same fate as Mad Catz. Here’s our take on why did this bankruptcy happened:

Mad Catz made a big bet in co-publishing Rock Band 4 with Harmonix, and it backfired

Image credit: VG 24/7
Image credit: VG 24/7

In an effort to boost profits, Mad Catz collaborated with music games developer Harmonix to co-publish Rock Band 4 in 2015. On top of that, they were also involved in making instruments for the game, but as we all know, the move backfired badly. Rock Band 4 sales were poor and it had a significant financial damage to the company as they reported an $11.6 million loss in 2016, which was a huge drop from the $4.7 million profit on the previous year. The financial loss rocked Mad Catz hard, with shares plummeted and huge layoffs being executed in an effort to save the company. Mad Catz eventually exited the partnership with Harmonix and they were banking on the sales of Rock Band 4 hardware instead, but the damage has already been done.

The quality of Mad Catz’s gaming hardware was debatable at best

Image credit: geek.com
Image credit: geek.com

One of the most important factors for a gamer’s choice in choosing gaming peripherals is the quality of it. Despite being a reputable company, Mad Catz’s products were either a hit-or-miss in terms of build quality. We searched the internet for user experiences, and we found many complaints on how their products were cheaply made, flimsy, and wouldn’t last long. Of course, the comments went both ways with some users reported positive experiences with them, which points to a certain deciding factor as we move to our next and final point.

Mad Catz’s price point for their gaming hardware was generally higher than other brands

Image credit: Battle of the Best
Image credit: Battle of the Best

It’s undeniable that user experiences for gaming products differ all the time, with certain unlucky users received malfunctioned hardware, while others got it in tiptop condition. This applies to other brands as well, but Mad Catz was at a slight disadvantage position due to the prices of their products. The company might have their own set of loyal supporters to sustain their business over the years, but new and uninformed consumers will ultimately choose cheaper alternatives from their competitors, especially when information about the build quality is easily accessible via a Google search. We won’t know for sure how it affected the downfall of Mad Catz, but it seemed likely that it contributed to their bankruptcy, if not ever slightly.

 

All in all, even though I never tried any of Mad Catz’s products, it still feels like a waste to see a company being forced to shut down its business, especially after operating for more than two decades. It is an unfortunate ending for them, but at least gamers will cherish the fond memories they had with Mad Catz, especially the avid collectors who bought most of their products since it started operating in 1989. You can also view their line of gaming products on their official site, which is still active as of press time. 

Source: Polygon

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Kin Boon
About the Author
Just your 'average' media newbie. Have interest in gaming (duh), superhero series, and I enjoy getting engage in conversations about footy. With that said, slight biasedness might be present if we are talking about Chelsea FC. Hope to see the world with my own pair of eyes in the future instead of viewing it through Instagram or Snapchat filters.
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