Last updated on November 15th, 2023 at 11:47 am
It’s not been the best week for the troubled developer and publisher, as Motorsport Games cuts staff and loses the BTCC license.
While reducing the headcount may be a reasonable decision for CEO Stephen Hood to lower costs and try to turn the business around, rights holder TOCA has removed the rights to the British Touring Car Championship video game due to ‘ongoing fundamental breaches of the agreement’.
Out of all the licenses acquired by Motorsport Games in the past, the NASCAR rights have already been sold to iRacing, and now the future of the BTCC rights will also be elsewhere. This leaves the FIA World Endurance Championship and 24 Hours of Le Mans, with Le Mans Ultimate planned for release in December, and Indycar, which may also be shopped to potential buyers given the sizeable staff cuts.
What does this mean for a BTCC game?
Rights holder BARC (TOCA) Limited didn’t hold back in their announcement to terminate their agreement with Motorsport Games, stating that;
“it has been forced to terminate that agreement forthwith, due to ongoing fundamental breaches of the agreement by Motorsport Games. Having been given sufficient latitude to rectify those contractual breaches, unfortunately Motorsport Games has failed to do so.
In order to protect the reputation and intellectual property of the BTCC, including those of its participants and partners, TOCA had been left with no option but to terminate the agreement and immediately withdraw all licensed BTCC rights that were provided to Motorsport Games under that agreement.
TOCA is aware that this news will come as a huge disappointment to our hundreds of thousands of fans, many of whom were eagerly anticipating the release of a new BTCC game… and we very much share that frustration, due to Motorsport Games being unable to fulfil its contractual commitments.”
This may mean that another developer or publisher acquires the rights, particularly as the prospect of a new British Touring Car game got a lot of people excited. Given that iRacing has already invested to acquire NASCAR, it seems unlikely they have the resources to take on another series for the time being, so potential buyers could include Kunos and 505 Publishing, Reiza, KW Studios, or EA for Codemasters to work on.
Out of all the possible options, perhaps the best fits would be either Codemasters and EA given the history with TOCA Touring Cars games, or potentially Kunos given their success in focusing on a single series with Assetto Corsa Competizione.
A further SEC filing also reveals that outstanding royalties and other sums payable to BARC, totally approximately $800,000, are now payable.
The loss of the license also raises a question over the continued availability of the rFactor 2 BTCC DLC, with the most recent release being the Team HARD Cupra Leon back in May.
Motorsport Games Has Laid Off 40% Of Staff
The loss of the BTCC license followed news that Motorsport Games has laid off 40% of staff as part of restructuring. It was revealed in an SEC filing, followed by various former employees sharing news of their redundancies on social media.
It impacts approximately 38 employees, “primarily in Australia and the United Kingdom”. This includes closing the sim racing website launched by Motorsport Games, and presumably Motorsport Games Australia, which was working on the Indycar game. That team was formed after the acquisition of Black Delta and their KartKraft title, which has seen no updates or development since 2022, and no major development since 2021.
Obviously we want to express out sympathies for everyone impacted by the cuts, and hope they’re all able to find other opportunities as soon as possible.
In terms of sim racing and Motorsport Games, reducing the headcount does make some sense. Especially given that the company has been warning it didn’t have sufficient funding for the future in pretty much every financial report it’s ever made. Online publishing isn’t particularly healthy right now, and the amount obviously invested in a sim racing website would probably never be self-sustaining, based on my experiences in large media businesses, and talking with other people running sim racing sites big and small. No-one is doing it to become rich, and very few are able to afford any staff, let alone sponsoring race teams etc.
It also became less viable after GMF Capital acquired the parent Motorsport Network Media, but not the gaming division. Meaning less funding and options to potentially work alongside the likes of Motorsport.com and Autosport.com.
Laying off Motorsport Games Australia may also be reasonable given the lose of two licences freeing up other staff. Le Mans Virtual is being developed by Studio 397 (rFactor 2), and the former 704 Games team will only be maintaining the NASCAR titles through 2024 following the sale of the license to iRacing. So having another development team working on a game which might be in doubt probably isn’t a good use of any funds Motorsport Games has left.
The best outcome would be if Motorsport Games potentially allowed the sale or release of KartKraft back to the original developers as part of any redundancy. It’s not the biggest or most valuable name in sim racing, but was progressing well until the acquisition, and still has a fanbase. And it seems unlikely that Motorsport Games will be doing anything with it, as their focus appears to be solely on Le Mans Ultimate for the foreseeable future.
The alternative is that it sits around until any sale or liquidation, where it’s unlikely to raise much income.
Motorsport Games is due to report third quarter 2023 financial results after markets close today, Tuesday November 7th, 2023, so hopefully there will be more details revealed about the future of the Indycar license.
Again, we wish the best to all individuals impacted by the news.
Keep up with all of our latest coverage of Motorsport Games, here.