Midway Games Inc. today announced it has come to mutually beneficial terms with licensing partners resulting in the cancellation of future versions of related game properties and associated development expenditures. The resolution of these licenses accelerates non-cash charges into the third quarter ended September 30, 2008, and, combined with other non-cash charges, results in a revision of Midway’s estimates for the third quarter.

Midway now expects a third quarter net loss of $0.70 per basic and diluted share, compared to its previously adjusted estimate of a net loss of approximately $0.49 per basic and diluted share. On a non-GAAP basis, which excludes approximately $0.10 of non-cash convertible debt interest expense, stock option expense, and deferred income tax expense related to goodwill, the Company now expects a loss of approximately $0.60 per basic and diluted share, compared to its prior estimate of $0.39 per basic and diluted share.

"The resolution of these licensing arrangements on good terms for the company is a very positive step as we continue to review Midway’s involvement with underperforming projects and focus on our core properties," said Matt Booty, interim CEO and president. "Our fall lineup and strong pipeline of games that tie in to market-leading licenses like DC Comics and TNA Wrestling underscore our strategy of aligning with consumer and entertainment properties that can drive a solid gaming experience."

It looks to me like Midway is attempting to remain afloat long enough for the Christmas season to buoy them into the next year and development cycle. But I fear that at the rate they are goign they might sink long before that happens.