According to one ex-Midway employee the reason for cash flow problems for the company is all the time they invested in altering the Unreal engine.
It all came to nothing and ended up putting "all the games way behind schedule." Money became tight after that and titles suffered the consequences, thus the "spiral of doom".
"The mistake we made was, instead of just taking the base Unreal 3 engine that 'Gears of War' was made on and building games off of that, we let our tech and product development guys try to really modify the engine to add all these diff things," an ex-employee told .
"It was a ton of new technology which they just weren’t capable of doing. It put all the games way behind schedule."
Each project had to adapt the UE3 engine for their own title's use despite Midway investing big money in a common technology base for the studios.
"The delays of next-gen titles pushed them into a window where money became very tight for the company," said former Chief Marketing Officer Steve Allison.
"When that happens decision-making can become focused around not always what is best for each title, but how to fix cash flow issues. This is a spiral of doom in videogame publishing because you can't ship compromised titles against the exceptional quality level of competition that is on the shelves."
"Most of those problems should be behind Midway now," he added. Let's hope so.