Can Majesco Be Saved?: An Analysis

No other video game publisher has undergone such a tumultuous ride in the past five years quite like Majesco. A publisher known for its portfolio of cheap shovel-ware and high profile acquisitions of retro licenses, (such as Double Dragon and Bloodrayne) it’s recently been under heavy financial stress and has had to limit its workforce to a mere five employees. Even worse, the company has spent all this time dodging NASDAQ delistings, with little to no news surrounding the games they actually publish. However, this may be changing. New rumors and reports from the company suggest they will build on a new digital approach, with other smaller publishers, helping them along the way, like Devolver Digital and U&E Entertainment. If pulled off successfully, it could be one of the biggest comebacks ever seen in the video game industry. Unfortunately, the million dollar question still lies. Is it possible?

A Change of Pace

The retail shelves Majesco so desperately tried to occupy.

In the case of Majesco, their newly announced digital push could be the best thing the company has seen in ages. They’ve always struggled with retail sales, and two generations prior they housed cult classics like Advent Rising, Psychonauts, and Phantom Dust that were overstocked and undersold. In fact, the only time they really found a right place in the physical market, was ultimately brief. Franchises like Cooking Mama, Zumba Fitness, and Hello Kitty were rampant sellers in a casual niche that only existed due to the Wii, and quickly faded under the growing implosion of the mobile phone game marketplace. “With the rapidly changing landscape of connected gaming, we have faced increasingly challenging market conditions while watching the high risk retail gaming business diminish in importance…” Said former CEO Jesse Sutton whilst speaking to Polygon back in Summer 2015, before his incoming departure. Sutton wasn’t alone. The same Polygon article, as well as numerous press releases and reports released around the same time, mention that Majesco had limited themselves to a mere five employees to cut costs. It was something unheard of in this industry. No major publisher, has ever downsized this thoroughly. Even the defunct THQ still has a sizeable number of employees working as lawyers, to protect licenses and such. Yet, unbelievable as it seems, Majesco’s layoffs were one of the best things the company has achieved in years.

Partners in New Places

Majesco’s Two Labels Pictured From Left to Right: Majesco (Also known as Zift), and Midnight City, which the company is boosting in order to make a mark digitally

So far, Majesco’s Stock Market Cap has increased from 9 million to 11 in just shy of a year. It already has two titles planned for the first month of 2016,(something the company was not able to achieve for a full eight months during 2015) and for the first time in a long while, once used to be major losses have significantly decreased. “Our operating loss fell dramatically from $2.3 million in the year ago quarter ended July 31, 2014 to $700,000 in this past third quarter, which ended July 31, 2015” stated newly appointed CEO David Rector, in the most recent earnings call. Rector, a formerly appointed principal of numerous gold and silver chains, seemed unfit for Majesco’s current state. He had never worked for a games company in his entire 40+ year career, and seemed to offer little to no word on Majesco’s representative future during his appointment. But for Majesco, it’s the miracle they’ve been waiting for. Rumors of mismanagement had been circulating the company for upwards of eight years and on the anonymous review service Glassdoor, Majesco had an approval rating of 24%. (These reviews were all based off the companies 2014 situation) If anything, Rector has breathed new life into a flickering ember. Majesco is a long way from returning to its glistening peak, but it’s certainly a start.

An Uncertain Future

Majesco’s label Midnight City, has become a more major and significant part of the company amid financial distress.

For a company that’s been unpredictable in the most distressing ways, it’s unclear to see if Majesco’s new indie approach will work well for them. In most scenarios, indie titles do not sell sufficiently until they are put on sale. (For example, indie darling Bastion made 60% of it’s first year of Steam sales this way) Majesco does not necessarily have the time and resources for this, even though their cash-flow is improving. An alternative to this could be budgeted stock in retail; However, this is a risky solution; especially based off of the company’s history. Lower priced titles like Shovel Knight or Wasteland 2 will never have the warranted consumer appeal. A last resort could be re-branding the company as a self-publishing port house, something that is already apparent based off of their January schedule. Picking up licenses with cult followings, could prove wonders in the long-run, but Majesco would still need to spend their money very carefully. No solution is easy or without major risk, therefore making Majesco’s task even more insurmountable.

Conclusion

In some aspects, Majesco’s financial ails make the disastrous fall of THQ seem tame in comparison. The company’s strategy is still mysteriously vague and doesn’t leave a good mark even within all the good news. They’ve got no major franchises to sell off, (Bloodrayne and Cooking Mama both died off a long time ago) setting an unrealistic pathway for any last minute comebacks if things get even worse. While there is still hope on Majesco’s horizon, there will be no situation in which they won’t be cutting it close. Every press release, review code, and ESRB ratings submission would be detrimental to the company’s bank, no matter how necessary they may seem. Majesco has no more corners to cut, no more presence at ease. They’re fully ready to die, it’s just now a question of if and when.

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