Mastertronic has entered administration today, with CEO Andy Payne on the way out as a result – however, a new company will be stepping in to buy the company’s rights and take on its staff. The new company will be focusing on the lucrative simulator market, making flight and train simulation games exclusively.
Founded by Martin Alper, Frank Herman, Terry Medway and Alan Sharam in 1983, Mastertronic rose to prominence during the 8-bit computer era as a publisher of budget games. The company became a major distributor of games and even acquired the renowned developer Melbourne House, but ran into cashflow problems as a result of the purchase. The company merged with Virgin Interactive and continued to trade, but as time went on the sales of 8-bit software declined. However, the company had been distributing Sega’s Master System since 1987 and was in on the ground floor for the Mega Drive launch in 1990. By 1991, Virgin Mastertronic was effectively a European Sega branch and this was made official when the Japanese manufacturer bought the company, retiring the brand name in the process.
However, Mastertronic returned in 2004 when a group of investors led by Frank Herman and Andy Payne merged Sold Out and The Producers, and bought the name back from Sega. The company has concentrated on budget PC games, digital releases and various retail and production ventures since then. However, the company struggled with debt in recent years and in the middle of last year, had to lay off 40% of its staff.
According to Payne, Mastertronic’s slide into administration has been the result of an investment deal gone wrong. In a statement, he said “We signed an investment deal with a Bahrain/Qatar based organisation back in February 2015 which would have seen our majority Dutch shareholder exit and be replaced by these new shareholding investors and the company financed going forward. Sadly, this organisation did not honour the contract and as a direct result have put us in the position we find ourselves in today. We made strategic investments into game development, based on this investment deal. When the Middle Eastern investors reneged on the deal, it left us desperately needing an alternative investor. Sadly we failed to find one in time.”