Motorsport Games Entire Board Of Directors Have Resigned

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The Motorsport Games Odyssey keeps on continuing. And it keeps on getting weirder. In the latest stroke of madness, the entire board of directors resigned due to a "proposal to raise additional capital".

As if the story of Motorsport Games couldn't get any more complicated and convoluted, today's news seems to top everything off.

As the American company tries to find a way to raise more capital, its parent company Motorsport Network seems to have made such an outrageous proposal that the entire board of directors have resigned.

But first, a little lesson in company structure and stocks:

What is a Board of Directors?​

A board of directors (B of D) is the governing body of a company, elected by shareholders in the case of public companies to set strategy and oversee management. The board typically meets at regular intervals. Every public company must have a board of directors. - Investopedia
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So a few key facts are:
  • The board of directors of a public company is elected by shareholders.
  • The board makes key decisions on issues such as mergers and dividends, hires senior managers, and sets their pay.
  • Board of directors candidates can be nominated by the company's nominations committee or by outsiders seeking change.
  • The New York Stock Exchange and the Nasdaq require listed companies to have a majority of outside, or independent, directors on their board.
Now the last of these points might prove troublesome for the company yet, as the current Board of Directors, which seems to be made up of 1 person appointed by Motorsport Network, is no longer NASDAQ compliant.

This means that, should no solution be found in the near future, Motorsport Games could be delisted from NASDAQ.

Why being delisted is bad.​

If a company has been delisted, it is no longer trading on a major exchange, but the stockholders are not stripped of their status as owners. The stock still exists, and they still own the shares; however, delisting often results in a significant or total devaluing of a company's share value.

Therefore, although a shareholder's ownership of a company does not decrease after a company is delisted, that ownership may become worth much less, or, in some cases, it may lose its entire value.

As a shareholder, you should seriously revisit your investment decision in a company that has become delisted. In many cases, it may be better to cut your losses. A firm unable to meet the listing requirements of the exchange upon which it is traded is quite obviously not in a great position. - Investopedia
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So, basically, if a company is delisted from NASDAQ, the stock value tends to drop dramatically. Meaning some investors or shareholders might think sooner rather than later to "get off the sinking ship".

So to keep a TL;DR of everything: This is pretty bad.

After saving themselves from delisting with a 1-to-10 stock split, they are now at risk again.

At this point, what do you think of this odyssey that Motorsport Games is going through? Is the company saveable? And how do you think will rFactor 2 be affected? Let us know in the comments down below!
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About author
Julian Strasser
Julian Strasser
Motorsports and Maker-stuff enthusiast. Part time jack-of-all-trades. Owner of tracc.eu, a sim racing-related service provider and its racing community.

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Comments

C
Austin Ogonoski said:
Rennsport will be fine.

Their "big idea" is copying flight sim and having a payware mod store, right inside the game.

Rennsport will partner with payware mod teams, and you'll be able to buy their mods through an in-game storefront alongside official DLC, instead of having to go to the RaceSimStudio website and paying to download a zip file.

From that point forward it will resemble AC or rFactor 2, with a slightly nicer UI & menu system.

The fear people have for this game is unfounded.
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It will be fine. No doubt on that. Especially when the sim market is shrinking with the death of pcars. While games like rf2, ACC and raceroom are at end of life (at least to me), new games will be released to replace the old ones.

It just doesn’t mean that I’ll get on Rennsport at this stage. It looks very offputting to me despite I’m the target audience for more GT3s on Spa/Monza.
 
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azaralamouri
(TLDR below):

After seeing how simulator development (the software side) is more of a hobby and a passion than making money. And after seeing the ugly options sim racers have to choose from, (which are: 1- either paying to a sim more outdated than my grandfather rip, 2- being forced to finance developers who waste their times only selling new liveries, skins, badges and DLC instead of really pushing the envelope forward 3- or getting a yearly release of an arcade without much improvement 4- or playing sims where there is nobody online to race against...). I think it's time for a riot.

The idea:
Motorsport should PAY the studios/ developers who are making a solid and realistic simulation of their series. I am not talking here about marketing or revenue, my point is:

I was watching Aris Drives. Konus made a simulator to a series of motor sport then they made the physics engine work in a way where you can individually change infinitive factors in the car setups which in turn changes the car behavior. What shocked me is that the physics engine is so sophisticated and REALISTIC that Aris trusts that the resulting change in the car behavior is similar to that of real life. Folks, do you understand how complex and endless the possibilities are? I don't. It's a miracle in my opinion. I feel the same when I watch (the first five minutes of) Niels Heusenkveld's videos. I won't get carried away and talk too much about an idea that can be summarized in a few words: physics engines are ingenious.

Now, I still haven't explained why I think that those studios should be paid from all sides instead of paying and especially the motor sport series simulated. Why?
Because:
The service that those developers are giving to this motor sport is priceless. They're bringing them the future today.

Soon we'll be living in an era where the physics engines will be trusted enough to the extent that those constructors can do their studies, calculations, development and testing on the simulator. And it will only cost them a few watts instead of money, manpower, time, safety, fuel, environment and taxes. Oh sorry I remembered, they already use the simulator today for that.
Soon one day the actual racing (yes) will be on the simulator.


TLDR: Some rich motor sport series or giant car manufacture or whatever should finance simulator studios instead of charging them money because a- they don't make much money to begin with and b- simulators are so useful to everyone including the motor sport itself first and the enthusiasts second.

(Sorry for long text, I have headache and it's hard to polish it now).
 
R
MadDriver11 said:
View attachment 617336

A company that spends 18M between overheads, development, sales & marketing and cost of revenues (not counting impairments and other "special" situations" which may still happen in the future as frankly the fact that general costs went down from 19M to 6.7M with other lines added from 2021 all concurring to practically the same total cost seems a suspicious internal movement of budget of non-compressible costs) to get only 5.5M revenues from that isn't a long term viable company.
BTCC game is schedule to happen in 2024.
According to the SEC official documents it appears they are in delay (breach?) of the delivery date for IndyCar game which seemed to be due some time in 2022.
To keep the thing going it seems like a lot of money has to be thrown into the system to keep MSG/RF2 afloat.
The alternative will be that MSG goes bankrupt, RF2 gets sold to someone but licenses and all the relevant financial burdens are released.
Which will also leave RF2 without anything really appealing to look forward to in the future.
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The company just took desperate decisions, heavily investing in development and marketing. It is quiet obvious the turnover didn't improve that much in comparison, but the marketing expenses should give results later. The growth margin have been reduced (costs increasing explained by rfactor2's recent development acceleration?) but still is good. It may have been better to reduce the growth margin by spending more money to make good games than increasing the marketing and sales expenses to tell more BS to players who don't want to play bad games. I don't know what is included in the development, but, as a current development should not appear in the P&L, it may be the cost of abandoned projects or the cost of the development team which didin't grow but just work on less new projects so its cost stay in the P&L (for a new project, a part of the team should be allocated on it and should appear on the BS). Anyway, a lot more should have been done on the existing catalog at the expense of the growth margin. Easy to say, hard to explain to shareholders though. It is really important to note that these figures haven't been certified and we don't know where they are from.

Obviously the promises made to the shareholders haven't been fulfilled, so these people resigned. All of this is bad but doesn't mean the company and the projects are over. Let's not forget the shareholders want at least their money back or, in the worse case, limit their loss. They want cash, not accounting results. I wonder what is included in the impairment of intangible assets, a bunch of IP no more relevant? How many of their assets still worth something? At the end, they will sell what they can to get some of their investment back. There is not a lot of chance to see such an unprofitable company to keep on its activity, unless the shareholders manage to sell some assets and accept to support a small activity after a costly lay-off plan.

The real question for rfactor2 is whether this game may interest any company. I don't think so (why investing a lot of money in an old game that has been struggling for years to evolve ; it may be faster and less complex to start from scratch or to use this engine to make another game), but the team and the technology behind may be interesting ; Nascar Ignition's fiasco can give huge doubts. though Unless S397 has other projects in parallel, there is no reason to buy the entity ; if you want the team, just hire the members, it is less expansive and they may get money from the lay-off plan.

I'm not optimistic for rfactor2's future but we never know. S397 could be sold at a low price to a big company (low price is better than nothing for a shareholder) which,, after paying that low price, could use some money to invest on the game and focus on its online competition side. I agree with many, rfactor2's last developments are showing something really positive
 
MJQT
davehenrie said:
I first started using AC primarily because they had some cars from the Can-Am series back in the late 60's-70's. And some tracks from the same era. But it became clear that the AI controled cars did not do well at most of the tracks. Same cars beaching on the same corners...over and over... Been quite some time since I've even booted AC.
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In fairness to AC, that sort of thing is fixable. Between new AI lines and AI hints to get particular cars around a particular track, the tools exist to fix it. Though you point to a curious feature of AC AI - especially for historic cars, they seem much more sensitive (i.e. prone to struggling) to the AI line/speed than isiMotor AI at a track with a generic AIW. Besides, the AIW system ain't perfect either. If one was to decide to not boot games on the basis of having particular cars struggle at particular corners, rF2 is arguably little better.
 
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stickdeath1980
Cheesenium said:
It will be fine. No doubt on that. Especially when the sim market is shrinking with the death of pcars. While games like rf2, ACC and raceroom are at end of life (at least to me), new games will be released to replace the old ones.

It just doesn’t mean that I’ll get on Rennsport at this stage. It looks very offputting to me despite I’m the target audience for more GT3s on Spa/Monza.
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yeah raceroom is very very much holding was dieing years ago it's sorta like that old dog that wont die
 
K
Cheesenium said:
It will be fine. No doubt on that. Especially when the sim market is shrinking with the death of pcars. While games like rf2, ACC and raceroom are at end of life (at least to me), new games will be released to replace the old ones.

It just doesn’t mean that I’ll get on Rennsport at this stage. It looks very offputting to me despite I’m the target audience for more GT3s on Spa/Monza.
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Well, AC2 is scheduled for 2024, that's the one I think a lot of us are waiting for.

In the meantime, AMS2 is still a work in progress and it feels like it will be around for a long time.

I'm still enjoying ACC a lot, even if its development is over (I guess) and some features that could have been included to make it better will never make it to the final product.

As for rFactor, I wish someone would buy the franchise and start work on rFactor 3. rFactor2 never really worked for me and they've been trying to make it better for a long time, but after so many years, it's getting a bit ridiculous. It would be better to start from scratch and make a whole new sim. Same goes for Raceroom. It's become really stale, they're just released new cars and tracks while the sim is getting less and less relevant.
 
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Durge Driven
I would be more worried if I say 99% of you lot :p;)

1. Make rfmods for all content anyway you like. Just make sure all content is used at least once.

If you do this Steam can't remove anything, if you don't use rfmods it will just vanish without you even knowing.

2. I backup the entire Main Steam folder ( only has rF2 in it ) just in case ( 220GB)

3. Downloaded every 3rd party content, archived it then unsubscribe the lot. :x3: That is why my main folder is not bigger 80GB of 3rdpaty workshop is not needed as it is archived ( you can make as many "package" folders as you like)

If you want to get the missing 370Z and GTR google them you will find steam workshop browser link, sign in you can subscribe them then find them in the workshop download and archive then unsub. Easy to find right number folder using Beyond Compare ie: set to show no folders.
 
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wolftree
azaralamouri said:
Motorsport should PAY the studios/ developers who are making a solid and realistic simulation of their series. I am not talking here about marketing or revenue, my point is:
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If wishes were horses, beggars would ride. The fact remains that games do not sell GT3 cars, but GT3 cars sell games, so the money only flows one way.

I do agree that greedy car manufacturers/racing series are damaging sim racing with their extortionate demands for licensing fees and exclusive deals. There's just no way a second rate national touring car series license is worth $900k and as a result there will never be a BTCC game again because the bigwigs now think whatever scam license fees MSG was willing to "pay" is now the industry standard fee. So we just end up with umpteen smorgasbord sims, each of which have the same Porsches, BMWs and Mercedes' because those are the only companies that understand the value of putting their image out there.
 
Mekonrider
wolftree said:
If wishes were horses, beggars would ride. The fact remains that games do not sell GT3 cars, but GT3 cars sell games, so the money only flows one way.
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Indeed. Sim racing is either nostalgic or aspirational for most people. There's a few cars I could afford from sims but it's mostly just because I can't do it in real life. If I was immensely wealthy I'd spend very little of my time in a computer cockpit. I'd be on the real tracks in real GT3 cars.
 
Terry Rock
It'd be a shame to lose RF2 during any type of re-structuring. Hopefully that doesn't happen.
The sim represents a 'love-hate' for me but was finally at a point I could accept.
Multiplayer has always been the bone of contention with this sim for me.
It wasn't too bad in the beginning....I could simply jump into one of Durge' sessions and run at old Spa.
As time went on, MP became more and more difficult.
Failed content installation etc...simply trying to join other servers/sessions.
Simple things were not getting addressed either....cotton-ball smoke/dust lasted for years and years.
The sim finally started getting good fixes about 1.5 years ago but MP remains largely a broken mess.
I'd actually stopped launching it or buying any new content due to not being able to race humans with it.
Okay!.... I'd launch it just about every four months to see if anything had changed.
I've come to accept that it is an off-line sim for the most part.
Having said that, the cars, the tracks, the lighting have all improved significantly over the last year and a half.
It would have been so much more utilized IF the multiplayer aspect had been addressed.
 
B
I also wished car brands and/or motorsports organizations funded racing sims instead of passively observing whatever is going on in that sector and taking them for granted for eternity. German manufacturers alone could well fund S397 if they wanted.
At that rate, and given the increasing complexity of a full blown sims for very little audience (compared to other games selling millions of units), there will be no new sim pushing boundaries, especially at the graphical level (including VR) and AI. One game that could really push graphics (PC4) got cancelled and we will never see what the next advancements in the Madness Engine could have been. There's a real possibility that the only new car games remaining next decade will be Forza and Gran Turismo. And even, interest in these may largely dwindle. Simracers are taking sims for granted to make use of their expensive setup, but tomorrow you could wake up with rF2, AMS2 or the newfangled one such as ACC2, Rennsports and that new Ian Bell GTR game stop being developed for whatever reason. Or course, AC alone can keep simracers busy until at least 2060, if it follows RBR's trajectory...
 
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PurgerUK
Premium
Terry Rock said:
It'd be a shame to lose RF2 during any type of re-structuring. Hopefully that doesn't happen.
The sim represents a 'love-hate' for me but was finally at a point I could accept.
Multiplayer has always been the bone of contention with this sim for me.
It wasn't too bad in the beginning....I could simply jump into one of Durge' sessions and run at old Spa.
As time went on, MP became more and more difficult.
Failed content installation etc...simply trying to join other servers/sessions.
Simple things were not getting addressed either....cotton-ball smoke/dust lasted for years and years.
The sim finally started getting good fixes about 1.5 years ago but MP remains largely a broken mess.
I'd actually stopped launching it or buying any new content due to not being able to race humans with it.
Okay!.... I'd launch it just about every four months to see if anything had changed.
I've come to accept that it is an off-line sim for the most part.
Having said that, the cars, the tracks, the lighting have all improved significantly over the last year and a half.
It would have been so much more utilized IF the multiplayer aspect had been addressed.
Click to expand...
Though strangely enough MP works well enough that we have multiple successful racing events every week on RD and though I haven't tried it LFM seems to be working out well from general feedback.
 
Pete Conway
Premium
If all we can look forward to in the 'road based' category is generic Jelly Mold GT3 cars then I see a dwindling market not worthy of financial support... but I'm just old.
 
wolftree
b)b said:
I also wished car brands and/or motorsports organizations funded racing sims instead of passively observing whatever is going on in that sector and taking them for granted for eternity. German manufacturers alone could well fund S397 if they wanted.
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The rumour is RennSport is backed by Porsche.
 
SYZRP
Kingkoenig said:
Well, AC2 is scheduled for 2024, that's the one I think a lot of us are waiting for.

In the meantime, AMS2 is still a work in progress and it feels like it will be around for a long time.

I'm still enjoying ACC a lot, even if its development is over (I guess) and some features that could have been included to make it better will never make it to the final product.

As for rFactor, I wish someone would buy the franchise and start work on rFactor 3. rFactor2 never really worked for me and they've been trying to make it better for a long time, but after so many years, it's getting a bit ridiculous. It would be better to start from scratch and make a whole new sim. Same goes for Raceroom. It's become really stale, they're just released new cars and tracks while the sim is getting less and less relevant.
Click to expand...
AC2 could be amazing. But I really hope they continue to use their own engine instead of unreal engine like they did with ACC. I also hope that they use the FFB from AC and not the FFB from ACC which feels significantly worse to me. But yeah, AC2 has the potential to become THE racing sim for both MP and single player. If they really develop the multiplayer system (support for race series, spectators, ranking system, matchmaking) and dont overmonetize the game the way iRacing does, they could easily become the de-facto racing sim on PC. Also I really hope they maintain the excellent mod support like the original AC since that adds so much value to the game.

Unfortuneately, I could also see them locking everything down and monetizing every aspect of the game.
 

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