Over the past few months, Motorsport Games (MSGM) has experienced significant financial losses and has made misleading announcements. During the Q2 earnings call, they incorrectly stated that NASCAR Heat 5 would receive a 2023 update, only to later sell the license to iRacing Motorsport Simulations LLC. They also revealed their consideration of selling all licenses they hold, including NASCAR, IndyCar, BTCC, and more.
Following that earnings call, MSGM suddenly announced the sale of the NASCAR License and reported ongoing negotiations with multiple companies.
Q3 Breakdown
After these setbacks, Motorsport Games released its Q3 earnings call on November 1, 2023. A few days later, BTCC filed for the termination of its contract with MSGM due to multiple contract breaches. To add to MSGM’s woes, they laid off the entire INDYCAR/KartKraft team and closed the remaining Miami office.
Motorsport Games CEO Stephen Hood commented on the sale of the NASCAR license, stating, “This quarter has continued to be one of business transformation.” He added, “Additional cost-saving measures have included the recent closure of our Australian development studio, global headcount reductions, and the suspension of the development of our previously planned IndyCar game to decrease operating expenses and remove underperforming projects. Furthermore, Le Mans Ultimate’s release has been pushed back from December to February 20, 2024. Motorsport Games also announced a $3.5 million loss during the third quarter, bringing total losses for the year to $16.7 million.”
Mike Straw from Insider Gaming mentioned, “Despite the lack of a release, IndyCar will still be due a ‘minimum guaranteed annual payment’ from Motorsport Games within 60 days of the start of 2024. Without payment, IndyCar can revoke its license from Motorsport Games. One source close to IndyCar says that, despite not being able to legally announce anything just yet, the company already knows its plans, and ‘frustration’ is setting in.”
Stock Market Earnings
Throughout the extensive quarter, Motorsport Games burned a significant amount of money and funding, including when its former parent company, Motorsport Network, was acquired by a financial firm. This situation leaves MSGM in a precarious financial position.
As of writing this article, Motorsport Games’ stock is trading at $1.28 at the time of market close. At the beginning of the year, MSGM faced the risk of being delisted from the market due to low funding, which they are currently nearing.
Motorsport Games also announced the discontinuation of Traxion.GG, which is a personal loss for me, as I enjoyed their articles and videos. With all these developments, it is evident that the end of Motorsport Games is approaching rapidly, and the future looks bleak for the company.
