But when will it end? August 21, 2023 marked the release of Motorsport Games’ Q2 report. And once again, the company is on the brink of collapse. Now, you may say that this is a habit for the American publisher, who flirts with Game Over every year. But while the WEC-based Le Mans Ultimate game, which is supposed to be used for the WEC eSport championship, has been announced for December 2023, what can we really expect in reality?
In practical terms, the coffers are empty, or almost.
After last year’s near-disaster, this time it’s the company’s coffers that are empty. But how long can the company hold out? After losing $8.9 million in 6 months, the company has seen its reserves fall from $2 million to $1.4 million. And that’s just between June and July. According to CEO Stephen Hood on the Earning Call, the company has no way of seeing out the end of the year.
Several solutions have been put forward to save the company:
- Restructuring
- Cost reduction
- The possible sale of the NASCAR license. This should delight NASCAR enthusiasts, since the games offered by Motorsport Games in this sector were far from satisfying gamers.
Le Mans Ultimate still on the calendar
The CEO of Motorsport Games clarified that the Le Mans Ultimate game, which will feature the entire official WEC 2023 season, is still on schedule. It should therefore be released in December 2023 as planned. However, the other licensed games, BTCC and Indycar, have been put on hold. It remains to be seen what will become of these licenses. And whether they will remain with Motorsport Games or be resold to concentrate efforts on rFactor 2 and LMU.
| Date | Share price |
|---|---|
| NASDAQ listing 01/15/2021 | 300,00$ |
| january 14, 2022 | 40,00$ |
| january 13, 2023 | 3,93$ |
| august 23, 2023 | 3,96$ |
In any case, let’s hope that the Studio 397 teams working on rFactor 2 and Le Mans Ultimate can continue to work under good conditions. And above all, let’s hope that, should the parent company go under, the studio will quickly be taken over by a more stable organization.
In fact, this is what Sam had already written in his article of November 16, 2022. When Motorsport Games was nearly kicked off the NASDAQ. You can find the article just below.
The November 16, 2022 article “When MG was almost delisted from NASDAQ”
Motorsport Games never stops falling. After shareholder lawsuits, outright lies at conferences, licenses bought for nothing and a catastrophic Nascar Ignition… Now the entire Board of Directors has resigned!
We can’t say it’s a shock – after all, we’re getting used to their antics. But it’s a more than precarious situation for Studio 397 and its gem rFactor 2. Let’s take a quick look at this latest fiasco.
What are the reasons for this latest episode?
What is the cause of this latest disaster? The desire of parent company Motorsport Network to make new capital calls to finance the company’s operations. To put it plainly: they need money and want to dilute the shares once again to keep the business going.
It has to be said that the company’s value has been falling steadily! To give you an idea, in January 2021 the share was valued at $350. Today, it’s just over $7. And this despite the Reverse Stock Split carried out in September, which exchanged 10 shares for 1. This time, the Board had had enough, and resigned on November 9. But this decision is likely to have a devastating impact on the company!
What are the repercussions for Motorsport Games?
The problem is that Motorsport Games is listed on NASDAQ. Without a Board of Directors appointed before December 29, the company will be de-listed. This is not the kind of adventure a company usually recovers from.
To understand the danger this event represents, you have to look at it from a shareholder’s point of view. It’s very easy to buy and sell shares in listed companies. They are what we call “liquid”. If the company isn’t liquid, you don’t want to buy. Unless, of course, you have a long-term project that’s sexy enough to keep you waiting… This is obviously no longer the case for Motorsport Games. And if the value falls, the whole company will be caught flat-footed (if that’s not already the case behind the scenes…).
In any case, we can expect shareholders to pull out before the company is delisted from NASDAQ. Quite simply, if Motorsport Games is unable to elect a new, competent board of directors, there won’t be much to salvage at the end of December.
Implications for rFactor 2: the grey zone
Obviously, as Simracer, what we’re all interested in is the future of rFactor 2! We’ve all enjoyed noticing the content updates from Studio 397 (the game’s developer). But, of course, we all remember that the studio belongs to the pseudo “Motorsport” empire. I think we’re all going to keep our fingers crossed now for a takeover of the company by a slightly more serious firm!
So, what do you think of the news? Do you think Motorsport Games can bounce back from this latest misstep? I must confess that, personally, the lies told to players at conventions and the financial shenanigans had already inoculated me against the company. And above all, what does the future hold for rFactor 2? That’s surely the central question of today’s news.
See you immediately below đ
