IndyCar moves to terminate pair of gaming licenses with Motorsport Games

IndyCar officials have moved to terminate the series' exclusive video game and esports event licenses with Motorsport Games "effective immediately,” according to a filing from the gaming company to the U.S. Securities and Exchange Commission, one day after MSG informed investors it had halted development of IndyCar's first mainstream console video game in nearly 20 years.

This comes days after one of MSG's other gaming clients, the British Touring Car Championship, informed the company it had revoked its own video game license for a product that continued to be delayed in production. MSG CEO Stephen Hood confirmed last week that the company had laid off nearly 40% of its staff this month, including completely shuttering an Australian studio that was in nearly full control of the development of IndyCar's video game that was supposed to be unveiled by September.

That timeline had been pushed back to 2024, and by mid-April, the company had a new CEO. The public-facing chaos, even amidst continued development of IndyCar's video game, led to the first round of significant questions in the spring as to whether the series' gaming product would ever see the light of day -- all while drivers, series officials, its most popular liveries and each present-day track had been scanned for development.

From last week:IndyCar video game in trouble as Motorsport Games halts development

Sources close to the production even told IndyStar last week that multiple tracks were in the final approval process, giving Penske Entertainment officials a tough call on whether to continue seeing MSG's project through. Unlike MSG's financial shortcomings in paying for its BTCC license, Hood told investors that the company had not defaulted on payments to Penske Entertainment, removing that reason as one IndyCar might use to bolster claims of revoking its license.

As Hood noted on the quarterly investor call last week, "(MSG) still retains all the technology and assets (in regards to IndyCar's video game), and we're currently identifying opportunities to resume development of the title elsewhere within the business with the hope of maintaining oversight and task control."

"(IndyCar) stated that its decision to terminate the IndyCar license agreements was due to (MSG's) alleged failure to satisfy certain of its obligations under (those agreements), including making IndyCar racing series video gaming products available in the United States and facilitating a minimum number of IndyCar racing series esports events," MSG officials wrote in an SEC filing dated Nov. 8 and made public Tuesday, detailing IndyCar's move to terminate its deals. "(MSG) is evaluating the validity of (IndyCar's) notice of termination, including demands for certain payments under the IndyCar license agreements, as well as (MSG's) options under the IndyCar license agreements."

In October, MSG sold its rights to NASCAR's future video game production to iRacing for nearly $4 million, while the previous rightsholder retaining the ability to sell from its NASCAR back catalog until the end of 2024. MSG rolled out a widely-panned NASCAR console game titled 'Ignition' in late-2021, a product that hit shelves with numerous bugs and glitches that MSG gaming engineers spent several updates rectifying, just months after IndyCar gave the gaming company its exclusive gaming rights. MSG managed to roll out a new product for Nintendo Switch in 2022 but failed to deliver any other new products before selling its future development rights.

iRacing is now targeting a 2025 release of a new NASCAR simulation-style console game.

A lifeline in an old partner:Could iRacing buy Motorsport Games' IndyCar video game license?

Seemingly, IndyCar would need MSG to make a similar sale of the intellectual property it currently holds in regards to its in-the-works IndyCar game that another developer could pick up, polish and finish, in order for the series to successfully launch a mainstream console game before late-2025 or early-2026, given the two-year window for NASCAR's new iRacing relationship and IndyCar's initial timeline with MSG when the pair announced its partnership in July 2021. Otherwise, IndyCar would be forced to start from scratch on a brand-new project from the ground level with a new partner.

One likely near-immediate impact of IndyCar's move to severe ties with MSG? The return of easily-accessible racing and streaming capabilities for American open-wheel racing fans on iRacing's simulator platform, which had been axed at the end of 2023 after IndyCar's most recent deal with the platform reached its end. With that, the series' gaming license deals with MSG prohibited IndyCar to enter into new similar contracts with another competing platform, meaning avid iRacing gamers could no longer stream IndyCar content, nor could they race modern-day cars on current tracks on the schedule -- most importantly, iRacing's highly-popular, ultra-competitive version of the Indy 500.

Though it's presently unclear what legal steps IndyCar and MSG will tread next to eventually end their relationship and determine what's to become of the years-long work on what would've been the series' first console game release since June 2004, Penske Entertainment would seemingly just need to strike a new deal with iRacing executives and flip back on an IndyCar 'switch' that was turned off Dec. 31 of last year.