8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): November 19, 2004

MIDWAY GAMES INC.

(Exact Name of Registrant as Specified in Charter)

Delaware (State or Other Jurisdiction of Incorporation) 1-12367 (Commission File Number) 22-2906244 (I.R.S. Employer Identification Number)

2704 West Roscoe Street, Chicago, Illinois 60618

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (773) 961-2222

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 1.02.Termination of a Material Definitive Agreement.

On November 19, 2004 WMS Industries Inc. and Midway Games Inc. terminated the following agreements between them: (i) the Tax Sharing Agreement dated July 1, 1996; (ii) the Tax Separation Agreement dated April 6, 1998; (iii) the Letter Agreement dated September 24, 2001; and (iv) the Settlement Agreement dated August 11, 2003. The agreements addressed the allocation of tax liabilities between WMS and its former subsidiary, Midway. The Tax Sharing Agreement and the Tax Separation Agreement were entered into in connection with Midway’s 1996 initial public offering and the 1998 distribution by WMS to its stockholders of its remaining Midway shares. The other two agreements were entered into subsequently concerning payments by WMS to Midway regarding the tax benefits of net operating losses and stock option deductions of the parties.

The parties terminated the agreements in settlement of a disagreement between them concerning the interpretation of the “change of control” provisions in the agreements. Under the termination agreement attached as an exhibit to this report, which was finalized on November 19, 2004, Midway agreed to pay to WMS the amount of $1,500,000. Three of the directors of WMS are also directors of Midway.

Item 9.01. Financial Statements and Exhibits.

(c)       Exhibits 

Exhibit No.  Description

99.1 Letter Agreement, signed November 19, 2004, between Midway Games Inc. and WMS Industries Inc. terminating tax agreements.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MIDWAY GAMES INC.
Date: November 19, 2004	By:	/s/ David F. Zucker
		David F. Zucker
		President and Chief Executive Officer

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Letter Agreement, signed November 19, 2004, between Midway Games Inc. and WMS Industries Inc. terminating tax agreements.

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EX-99.1

EXHIBIT 99.1

Midway Games Inc.

2704 West Roscoe Street

Chicago, IL 60618

November 17, 2004

WMS Industries Inc.

800 South Northpoint Boulevard

Waukegan, IL 60085

Gentlemen:

Reference is made to the following agreements between us (collectively, the “Tax Agreements”): (i) Tax Sharing Agreement dated July 1, 1996; (ii) Tax Separation Agreement dated April 6, 1998; (iii) Letter Agreement dated September 24, 2001 (“Letter Agreement”); and (iv) Settlement Agreement dated August 11, 2003 (“Settlement Agreement”). Capitalized terms not otherwise defined herein shall have the meanings set forth in the Tax Agreements.

Disputes have arisen between us regarding the interpretation of the Tax Agreements. This letter confirms our agreement to compromise and settle these disputes and all other matters regarding the Tax Agreements. In order to resolve finally all arrangements between us regarding the Tax Agreements, we hereby agree as follows:

1.Midway shall promptly pay to WMS the amount of $1,500,000. In consideration for such payment, Midway shall have no further obligation to repay to WMS the Option Tax Payment (under the Letter Agreement) or to make any further payments under paragraph 1 of the Settlement Agreement.

2.Midway and WMS further agree that the Tax Agreements shall hereby be deemed terminated and of no further force and effect.

If the foregoing is in accordance with your understanding, please sign this letter in the place provided below.

	Very truly yours,
	Midway Games Inc.
	By:	/s/ Thomas E. Powell
		Thomas E. Powell
		Executive Vice President - Finance,
		Chief Financial Officer and Treasurer
WMS Industries Inc.
Agreed to:
By: /s/ Scott D. Schweinfurth
Scott D. Schweinfurth
Executive Vice President,
Chief Financial Officer and Treasurer

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