According to
Yahoo! News, Midway Games Inc. has closed their Milpitas, California development studio known as 'Midway Games West' (formerly the Atari Games Corporation, see related closure news
here). Along with this closure, it cancelled work on two unnamed titles to be released in 2004 and let go about 70 people. Midway will be merging that studio's remaining development operations into Midway's San Diego, California studio. But rest assured, that since the Mortal Kombat development team is based out of Chicago, this should not effect them at all.