Should IndyCar Continue to Fish or Cut Bait?

Before we get to today’s post, I would like to acknowledge the loss of someone known to almost everyone in every IndyCar Media Center. Susan and I first met Eric Schwarzkopf ten or twelve years ago, when we were staying at the same hotel near Barber Motorsports Park. He just started talking to us in the parking lot, as if we had known each other for years. Eric was passionate about many things; photography, IndyCar, power-boat racing, food of all types, the Colts, the Purdue Boilermakers, his pets and his son Matt. He had a larger than life personality, a tremendously sharp wit, and always referred to people like Paul Dalbey and myself as “Damned Bloggers”.

We really got to know Eric during all of the downtime at the rain-filled race weekend at NOLA. At Road America, we were eating at our favorite restaurant one night when Eric walked in and joined us at our table. The last time we saw him was Qualifying weekend last May, when he joined us for lunch at Honda Hospitality. He had just lost his brother, but seemed more concerned about Susan’s health than anything.

Eric was about five years older than us, but apparently kept his own health issues a secret. About three weeks ago, he announced on Facebook that he was having serious heart issues. On March 13, he asked for prayers as he was going in for open-heart surgery the next day. Last Wednesday, a mutual friend sent me a message, telling me that Eric was on life-support and was needing a miracle. We learned yesterday afternoon that Eric passed away in Indianapolis on Saturday night.

I’m not sure I have spent a Month of May without a one-on-one conversation with Eric in the past decade, whether it was over a meal, in the Media Center or in the pits. That’s not to insinuate that we were best friends. It just emphasizes that Eric made a point to get around and talk to everyone. To say Eric Schwarzkopf will be missed is a gross understatement. Rest in Peace, Eric. Salt Barn! (his friends will get that). Now, on to today’s topic.

I am in my comfort zone, when I write about upcoming races and races that have just transpired. I also feel like writing about current teams and drivers, as well as participants from yesteryear are all in my wheelhouse. Likewise for most things that have to do with IMS or Indianapolis 500 traditions or trivia. I am not in my comfort zone, when discussing video games or the earnings reports for companies that produce video games.

But when the news came out Friday that Motorsports Games (MG), the company selected to produce IndyCar’s first foray in almost twenty years into the video game market, had informed IndyCar that said video game would not be coming out in 2023 – I felt the need to comment, not that what I say will amount to anything.

When Motorsports Games was chosen to develop the first video game for console and PC since 2005, it raised eyebrows – and not in a good way. I actually still own the Codemasters IndyCar game that came out in 2005. I believe that was made for Windows XP. Through various versions of Windows, it lost many of its capabilities over the years. I had a Logitech Momo wheel with pedals and paddle shifters, but it stopped being compatible as we trudged through Windows Vista, 7, 8 and now 10. I have not stepped up to Windows 11 and won’t until I have to. Change is Bad!

As compatibility was lost over the years, so was my interest in the whole gaming world. I did a 90-day trial of iRacing a few years ago, while my wheel was somewhat compatible. I quickly realized that not only was my equipment not up to date – neither was I. That’s a long way of saying that I am no longer in the targeted demographic for video games. But I know a lot of people are.

I consider a top-notch video game to be vital if IndyCar wants to attract the interest of young potential fans. If 100 Days to Indy on the CW is half as successful as they want it to be, it sure would be helpful if there was a video game out there that these now-interested prospective fans could play. We know there is currently not one out there, but at least IndyCar could promise these fans to be patient as they watched the rest of the 2023 season unfold and there would be a video game coming shortly after the end of the current season. Now, there is no such promise.

If you really want to get me out of my comfort zone, ask me to interpret the latest earnings report for Motorsports Games. In a nutshell, their fourth-quarter financial report presented a worse picture than had been feared in a year that had already been very grim. In short, they had already lost millions and now they’ve lost millions more.

Their brief announcement pretty well summed up everything; “Based on this cash and cash equivalents position, and the Company’s average cash burn, we do not believe we have sufficient cash on hand to fund our operations for the remainder of 2023 and that additional funding will be required in order to continue operations,” Their statement went on to say: “For our IndyCar game, we continue to make strides in our development efforts but we do not believe we will be in a satisfactory position to release it to the community this year,”

IndyCar has a problem, and the answer is probably not as clear as some might think. I have no earthly idea of what financial or contractual arrangement exists between Motorsports Games and Penske Entertainment. I am certain that MG has paid IndyCar a fairly substantial fee for the licensing of the game. It was substantial enough for IndyCar to pull its likenesses off of iRacing, much to the chagrin of many longtime IndyCar fans.

I would like to think there is some clause in their agreement that allows IndyCar to back out of the whole thing if MG is unable to deliver the game by the proposed date of late 2023. Again, I know nothing of the agreement, so I don’t know if IndyCar can just walk away, give the licensing fee back or if there is a buy-out penalty.

Then there is the question…Should IndyCar stay the course? The first thing they need to decided is how viable MG is as a company going forward. I’ve read mixed reviews of some of their NASCAR efforts that were created when the company had substantially more resources than they do now. Even if MG restructures and stays afloat, how long will it take to produce the game and bring it to market? And how good or bad will the game be?

IndyCar has almost two years invested in this process. How far along is MG in the creation of this game? Is it more than 50% complete? We’ve seen screenshots of the game, but that’s a lot easier to produce than the actual platform to build a game of this magnitude. If they are less than 50% complete, I think IndyCar should probably part ways with MG and chalk it up as a learning experience. Then they have to start the process all over again and shop the entire project around to find another potential partner.

This is a huge mess. The longer this goes, the more egg is on IndyCar’s face. This is up there with the abandoned races in China and Boston over the past decade or so, both caused by IndyCar’s failure to do due diligence and cover themselves legally.

But as described above, it’s not as easy as just deciding to continue to fish or cut bait and moving on. IndyCar will need to dig deep into MG’s financial report and be assured they are dealing with complete transparency. Based on what has happened so far, that is questionable at best. Then IndyCar will have to examine the pros and cons of pulling the plug and starting over, after so much time has already transpired.

IndyCar does not need this latest embarrassment. I am hopeful that this weekend’s race in Texas is a huge success and we have a race even better than last year’s. After an offseason which featured a lot of unflattering news for IndyCar and a season-opening race that made some of the self-loathing IndyCar fans “hang their head in shame” and fear what F1 fans thought – IndyCar needs some good news, for once. Fans did not need to be reminded of this ongoing blunder in the mini-offseason. Let’s hope that next Monday, we have something really positive to discuss.

George Phillips

8 Responses to “Should IndyCar Continue to Fish or Cut Bait?”

  1. Holy Cow!!! So sorry to hear about Eric. What a shock!

    As far as the video game goes… After having spent a career in both the military and the federal government, sometimes the lowest bidder is not always the best choice. I am sure there were several “better” but perhaps more expensive choices out there. I also do not know the details of the existing agreement, but I do agree with you… if they’re not at least 50% complete with the project, cut your losses Indycar and find a better option!

  2. Brandon Wright Says:

    This game will likely never see the light of day. Motorsports Games is a scam, the people in charge of it have a long history of this behavior. They buy up properties, make grand promises, then deliver garbage. They got the NASCAR license a few years ago and the game they released a game so bad that NASCAR began actively trying to get out of the deal and they didn’t even bother having them release the next year’s installment of the game. MG also had the license to make a BTCC game, it has been cancelled as well.

    There was recently a World of Outlaws game released for consoles that is apparently really good and was made with the help of iRacing. If IndyCar had gone that route we would for sure be getting a game this year and it would likely be quite good. This was a bad decision and it’s going to be a mess to get out of and likely set the release of an IndyCar game back by at least a couple years.

  3. I have gotten annoyed over the past year with the droves of folks coming out of the woodwork suggesting Penske doesn’t have a clue, is a bad business man, etc. His multi-billion dollar empire would suggest otherwise in my humble opinion. That said, this one’s a head-scratcher for me. Though I wouldn’t expect Roger, Mark Miles, et. al. to have any knowledge of the video game industry, one would THINK these guys would be smart enough to seek out the advice and guidance of someone who does before they sold the rights to MG. It’s not like they needed to hire the Boston Consulting Group on this one. They could have just read or Marshall’s mail bag. This sort of poor decision-making is a little scary because it makes us have to think if not question what other poor decisions are being made. Now I’m starting to contradict my opening sentences, so it’s time to exit stage right.

  4. Just kick in the door and make them an offer they can’t refuse. Buy those punks out, run them out of town, Then hire new people. Motorsports Games would be a nice addition to Penske Entertainment and have full control of your Gaming product.

  5. billytheskink Says:

    Unfortunately, there is really no reason to believe there is going to be any way forward for Indycar and Motorsports Games. The partnership will likely dissolve one way or another and the only ones who will be happy about anything will be the lawyers.

    Race in peace Eric. Prayers for comfort and peace for his family and friends.

  6. Cut bait. One look on Steam and you can see the abundance of racing games available. I don’t think there is any way that Indycar could make a dent in this market when so many good games already exist. I think only hard core sim racers/Indycar fans would purchase if it ever saw the light of day.

  7. James T Suel Says:

    Hopefully this deal with the current game maker goes away. I am a admirer of Penske. However their entertainment division is sorry at best. Even the Indycar app does not perform well at all. They continue to remove traditional events at Indy. They need help big time in that department. This is not the type of business Penske does well.

  8. Well the first mistake was thinking Motorsports Games would deliver on it’s promise to IndyCar and a close second is IndyCar leaving Iracing giving no real racing option for its fans

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