Midway Games (MWY) 8-K Midway Reports 2006 Q1 Results

Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACT:
Geoffrey Mogilner
Midway Games Inc.
(773) 961-2222
gmogilner@midway.com

MIDWAY REPORTS 2006 Q1 RESULTS

Chicago, Illinois, May 3, 2006— Midway Games Inc. (NYSE: MWY) today announced results of operations for the three month period ended March 31, 2006. The Company also confirmed its prior full year guidance and provided revenue and earnings guidance for the second quarter ending June 30, 2006.

FIRST QUARTER RESULTS
Net revenues for the 2006 first quarter were $15.4 million, an 11% increase over 2005 first quarter net revenues of $13.8 million. The 2006 first quarter loss applicable to common stock was $22.6 million which includes $0.8 million of stock option expense, or a loss of $0.25 per share, compared with a 2005 first quarter loss applicable to common stock of $16.0 million or a loss of $0.19 per share.

Other recent operating highlights include:

• During the first quarter of 2006, Midway launchedNBA Ballers: Phenomfor Xbox in North America;Midway Arcade Treasures: Extended Playfor the PlayStation Portable (PSP) andGauntlet: Seven Sorrowsfor PlayStation 2 and Xbox in Europe; andMidway Arcade Treasures: Deluxe EditionandL.A. RUSH, both for the PC, worldwide.

• In addition, Midway announced thatMortal Kombat: Armageddon, the final installment for this franchise on current generation systems, is expected to be available for PlayStation 2 and Xbox this fall.

• To date, Midway has announced support for all major platforms including next generation systems Xbox 360, Nintendo Wii and Sony PlayStation 3, as well as handheld systems Nintendo DS and Sony PSP.

• Also during the quarter, Midway announced the broadening of its in-game advertising strategy and executed a multi-year, multi-game agreement with Double Fusion to provide dynamic advertising within select, future Midway titles.

David F. Zucker, president and chief executive officer, commented, “We are pleased to report that we made progress during the first quarter toward our operating objectives for 2006. First quarter results were consistent with our guidance and Wall Street expectations, and during the quarter, we continued to extend our presence overseas, grow new potential revenue streams such as dynamic in-game advertising, and broaden our support for the new console platforms.”

OUTLOOK
For the quarter ending June 30, 2006, Midway expects net revenues of approximately $25 million, with a net loss of approximately $32 million. For the second quarter, Midway has releasedNBA Ballers: Phenomfor PlayStation 2,Rampage: Total Destructionfor PlayStation 2 and Nintendo GameCube, and expects to releaseNBA Ballers: Reboundfor the PSP this week. During the remainder of the quarter, the Company also expects to releaseRise & Fall: Civilizations at Warfor PC andMLB Slugfest 2006for PlayStation 2 and Xbox. For the year ending December 31, 2006, Midway continues to expect revenues of $155 million with a net loss of approximately $66 million, which includes approximately $3 million of stock option expense.

Mr. Zucker commented, “Although 2006 continues to be a transition year for the industry, we are committed to showing modest revenue growth in spite of the overall industry downturn. We are focused on our goal of increasing our market share early in the new console cycle. To that end, we are concentrating our resources on developing what we believe will be some of the best technology and highest-potential intellectual properties in the industry for the next generation consoles. We continue to make great strides in honing our development and marketing processes, and we are excited to be able to show in greater detail some of our progress at the 2006 Electronic Entertainment Expo (E3) in Los Angeles next week.”

CONFERENCE CALL
Midway Games Inc. is hosting a conference call and simultaneous webcast open to the general public at 4:30 p.m. EDT today, Wednesday, May 3, 2006. The conference call number is (866) 277-1181 or (617) 597-5358 (international callers). The access code for the call is 56448994. Please call ten minutes in advance to ensure that you are connected prior to the presentation. Interested parties may also access the live call on the Internet at www.investor.midway.com or at www.earnings.com. Please log-on fifteen minutes in advance to ensure that you are connected prior to the call’s initiation. Following its completion, a replay of the call can be accessed until May 10 by dialing (888) 286-8010 or (617) 801-6888 (international callers). The access code for the replay is 56466129. Additionally, a replay of the call will be available for twelve months on the Internet via www.investor.midway.com.

ABOUT MIDWAY
Midway Games Inc. (NYSE:MWY), headquartered in Chicago, Illinois, with offices throughout the world, is a leading developer and publisher of interactive entertainment software for major videogame systems and personal computers. More information about Midway and its products can be found at www.midway.com.

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 concerning future business conditions and the outlook for Midway Games Inc. (the “Company”) based on currently available information that involve risks and uncertainties. The Company’s actual results could differ materially from those anticipated in the forward-looking statements as a result of these risks and uncertainties, including, without limitation, the performance of the interactive entertainment industry, dependence on new product introductions and the ability to maintain the scheduling of such introductions, the current console platform transition and other technological changes, dependence on major platform manufacturers and other risks more fully described under “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, and in any more recent filings made by the Company with the Securities and Exchange Commission. Each forward-looking statement, including, without limitation, financial guidance, speaks only as of the date on which it is made, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances.

–tables follow–

Midway Games Inc., 5/3/06 page 3

MIDWAY GAMES INC.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(unaudited)

	Three Months Ended
	March 31,
	2006			2005
Net revenues	$	15,396		$	13,815
Cost of sales:
Product costs and distribution		7,570			5,066
Royalties and product development		7,114			3,530
Total cost of sales		14,684			8,596
Gross profit		712			5,219
Research and development expense		10,662			8,966
Selling and marketing expense		6,453			7,280
Administrative expense		5,347			4,180
Operating loss		(21,750	)		(15,207	)
Interest income		995			628
Interest expense		(1,691	)		(353	)
Other income and (expense), net		194			(633	)
Loss before income taxes		(22,252	)		(15,565	)
Provision for income taxes		347			328
Net loss		(22,599	)		(15,893	)
Preferred stock dividends:
Distributed		—			63
Imputed		—			2
Loss applicable to common stock	$	(22,599	)	$	(15,958	)
Loss per share of common stock:
Basic and diluted	$	(0.25	)	$	(0.19	)
Weighted average number of shares outstanding:
Basic and diluted		90,410			85,642

– balance sheets follow –

Midway Games Inc., 5/3/06 page 4

MIDWAY GAMES INC.
Consolidated Balance Sheets
(In thousands)

	March 31,			December 31,
	2006			2005
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	87,006		$	98,376
Receivables, net		7,863			30,835
Inventories		3,769			5,811
Capitalized product development costs		34,951			27,570
Prepaid expenses and other current assets		13,583			16,134
Total current assets		147,172			178,726
Capitalized product development costs		706			25
Property and equipment, net		19,458			19,049
Goodwill		41,074			41,108
Other assets		9,325			9,355
Total assets	$	217,735		$	248,263
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	7,180		$	12,431
Accrued compensation and related benefits		2,826			4,060
Accrued royalties		3,245			3,938
Accrued selling and marketing		2,483			4,418
Deferred revenue		2,255			384
Current portion of long-term debt		3,333			3,333
Other accrued liabilities		11,312			13,440
Total current liabilities		32,634			42,004
Convertible senior notes		75,000			75,000
Long-term debt		6,111			6,944
Deferred income taxes		8,414			8,086
Other noncurrent liabilities		658			784
Stockholders’ equity:
Common stock		924			922
Additional paid-in capital		429,876			431,273
Accumulated deficit		(325,698	)		(303,099	)
Accumulated translation adjustment		(525	)		(439	)
Deferred compensation		—			(3,610	)
Treasury stock		(9,659	)		(9,602	)
Total stockholders’ equity		94,918			115,445
Total liabilities and stockholders’ equity	$	217,735		$	248,263

– supplemental data follows –

Midway Games Inc., 5/3/06 page 5

MIDWAY GAMES INC.

Net Revenues by Platform

(in thousands)

	Three Months
	Ended March 31,
	2006				2005
Sony PlayStation 2	$	6,923	45.0	%	$	6,391	46.3	%
Microsoft Xbox		4,280	27.8	%		2,654	19.2	%
Nintendo Gamecube		331	2.2	%		2,606	18.9	%
Personal Computer		474	3.1	%		0	0.0	%
Sony PlayStation Portable		1,867	12.1	%		0	0.0	%
Nintendo Game Boy Advance		192	1.2	%		297	2.1	%
Royalties		1,252	8.1	%		1,785	12.9	%
Other		77	0.5	%		82	0.6	%
Total	$	15,396	100.0	%	$	13,815	100.0	%

MIDWAY GAMES INC.

Net Revenues by Geography

(in thousands)

	Three Months
	Ended March 31,
	2006				2005
North America	$	11,467	74.5	%	$	10,723	77.6	%
International		3,929	25.5	%		3,092	22.4	%
Total	$	15,396	100.0	%	$	13,815	100.0	%

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