Chicago - Video game publisher Midway Games (NYSE: MWY) on Tuesday announced a cost-cutting plan that includes laying off 25% of its staff, suspending development on several titles, and the closure of its Austin studio. "The cost-reduction measures are vital for us to rationalize our operations and provide the resources necessary for our core properties to succeed," said Matt Booty, president and CEO of Midway. "These initiatives, along with the other steps we have taken this year, are a response to the specific challenges we are facing at Midway, many of which have been amplified by the current economic conditions."

New York - Sumner Redstone, whose National Amusements holding company controls Viacom (NYSE: VIA), CBS, Paramount Pictures and other media assets, is expected to announce on Monday that he will sell its 87% majority stake in Midway Games (NYSE: MWY) to investor Mark Thomas, The Wall Street Journal reported. National Amusements will receive just $100,000 in cash for the struggling game publisher, while Thomas will also assume $70 million in secured and unsecured debt.

Chicago - Video game publisher Midway Games is facing eight separate class action lawsuits, filed on behalf of shareholders who allege the company either failed to disclose or misrepresented facts related to its performance, and engaged in insider trading.