3D Realms files lawsuit against Gearbox Software
#4 Posted 13 June 2013 - 01:19 AM
Law360, New York (June 12, 2013, 7:28 PM ET) -- Video game developer Apogee Software Ltd. claims Gearbox Software LLC owes it more than $2 million in unpaid royalties and advance payments after Gearbox bought rights related to Apogee's "Duke Nukem" video game, according to a breach of contract suit filed Friday in Texas state court.
Apogee, which does business as 3D Realms Entertainment, says Gearbox has failed to pay the money under the terms of a 2010 purchase agreement the companies inked, and claims the company has also barred 3D Realms from conducting an independent audit of the royalties Gearbox has earned.
“3D Realms has therefore been required to file this lawsuit to enforce the purchase agreement, to recover the amounts due and owing from Gearbox and to enforce the audit right provided by the agreement to enable it to conduct an audit of Gearbox's royalties,” the complaint says.
Gearbox on Wednesday emphatically denied the allegations in 3D Realms' complaint.
"The reality is that 3D Realms received the full benefit of its bargain," the company told Law360. "Gearbox, in fulfillment of its commitments, enriched 3D Realms, saved 3DR from its debts and rescued 3DR from its failed dozen plus year attempt to ship [video game] Duke Nukem Forever."
"Everyone wished that 3DR's game was better received by the market for the benefit of gamers and profit to its creators," Gearbox added. "While 3DR might not wish the reality that the results make clear, 3DR turned out to be the only beneficiary of the deal. Gearbox Software, meanwhile, experienced damage to its credibility and loss of its money."
In 2010, Gearbox purchased certain interests and intellectual property to develop future games based on "Duke Nukem," including the rights to complete and sell games called “Duke Nukem Forever” and “Duke Begins,” according to the complaint.
Gearbox agreed to repay a $2.9 million loan that 3D Realms owed another software company and agreed that 3D Realms would receive a percentage of Gearbox's royalties for future "Duke Nukem" games, according to the complaint. Gearbox also said it wouldn't recoup any portion of the loan before it paid 3D Realms' royalties, the complaint says.
3D Realms said the deal was one among friends, as Gearbox's president had a long-standing friendly relationship with its principals.
But after the deal closed, Gearbox allegedly refused to make royalty payments to 3D Realms and allegedly refused to allow an independent auditor that 3D Realms hired to audit Gearbox's records, the complaint says. 3D Realms says such royalty audits are standard practice in its industry.
3D Realms contends that the unpaid royalties on the $2.9 million exceed $800,000, and it also says that Gearbox has failed to pay royalties on $4.5 million it has received, resulting in a $1.3 million loss for 3D Realms, the complaint says. It also contends that Gearbox should send it more than $500,000 in future advances it has received, under the terms of their purchase agreement.
“Despite the assurance it provided to 3D Realms, Gearbox now claims that it is entitled to first deduct the full amount of the debt it assumed (i.e. the entire $2.9 million Duke Loan) before any royalty payments become due to 3D Realms,” the complaint says. “Thus, Gearbox is turning the tables.”
3D Realms is represented by Leonard Hirsch of Diamond McCarthy LLP.
Counsel information for Gearbox wasn't immediately available on Wednesday.
The case is Apogee Software Ltd. d/b/a/ 3D Realms Entertainment v. Gearbox Software LLC, case number DC-13-06381 in the District Court of Dallas County.
--Editing by Jeremy Barker.
#9 Posted 13 June 2013 - 04:19 AM
well NUKEMDAVE wrote that you found it first, thanks for this,
boy oh boy, without the details I wont commend, for now, yeah, it does look like the nightmare is continuing ...
#10 Posted 13 June 2013 - 04:46 AM
Crap, can you imagine what the sheet looks like for the case that SEGA is bringing for Colonial Marines? I bet there are more 'X's there than at Dr. Xaviers school reunion.
#12 Posted 13 June 2013 - 07:49 AM
Sometimes, I act like a stupid asshole. I know, and I'm sorry about that. :(
This post has been edited by Player Lin: 13 June 2013 - 07:49 AM
#13 Posted 13 June 2013 - 07:55 AM
I'd say let sleeping dogs lie, but I guess lawyers (and 3DR) see things differently, so it can't be helped. Let them continue their little private war. We will keep doing stuff over here that REALLY matters.
Please help us to add stuff still missing in the HRP: Duke3D HRP To-Do List
This post has been edited by NightFright: 13 June 2013 - 08:05 AM
#16 Posted 13 June 2013 - 08:32 AM
There is no race, only racists.
Proud trigendered babysexual pan-Korean anarcho-transhumanist
Free cutting scar removal for Zoey! SANDERS CURRENT YEAR!
WE WILL NOT BE SILENCED BY DONALD TRUMP'S VIOLENCE!
#18 Posted 13 June 2013 - 08:57 AM
I have absolutely no insight into it. But these bucks could maybe be spent on ROTT (yes, I know, it is produced by the other Apogee, but maybe some money comes from Ltd too), other IP's they are producing (SW reboot), etc... just saying.
EDIT: I meant to edit pevious post, sorry for double posting. Cannot find a link to delete a post, sry.
EDIT 2: Statement from Gearbox in this article:
This post has been edited by fuegerstef: 13 June 2013 - 09:01 AM
#19 Posted 13 June 2013 - 09:11 AM
And fuck giving those cunts undeserved ad revenue.
The reality is that Apogee / 3D Realms (3DR) received the full benefit of its bargain. Gearbox, in its fulfillment of its commitments, enriched 3DR, saved 3DR from its debts and rescued 3DR from its litigation surrounding its failed dozen-plus year attempt to ship Duke Nukem Forever.
Everyone wished that 3DR's game was better received by the market for the benefit of gamers and profit to its creators. While 3DR might not wish the reality that the results make clear, 3DR turned out to be the only beneficiary of the deal. Gearbox Software, meanwhile, experienced damage to its credibility and loss of its money.
It's unfortunate that 3DR did not abide by the the objective audit rules outlined in the agreement and even more unfortunate that it chose to blame its failures on Gearbox. Since 3DR seems unable to accept reality and has chosen to become hostile, Gearbox is forced to bring its actual claims of breach of contract against 3DR and is confident Gearbox will prevail.
Perhaps the lesson learned here is to never enter a gaming business deal with a person who has had more lawsuits than shipped games.
These lines are particularly interesting.
This post has been edited by trustn0!: 13 June 2013 - 09:14 AM
#23 Posted 13 June 2013 - 09:55 AM
Then again, just how the hell do you screw up Alien Colonial Marines, that takes real talent. I mean, the film makers were giving them behind-the-scenes info and guidance. They are making a game featuring one of the greatest movie monsters ever realised and they have James Cameron as a go-to guy - just how the fuck did they manage to fail?
#24 Posted 13 June 2013 - 10:02 AM
Seriously, I just got back from a nice sunny vacation, and then this bullshit happens? WTF!?
Jeez I'm not sure who's guilty here, but after all the talk, and quotes from George himself saying how they struck up a nice deal with Gearbox, and how good a relationship they have when GBX first took over, how in the blue HELL could this possibly happen? All Randy's words of how much he loved Duke/3DR and how he was gonna treat the IP right, is now shit. I bet Randy is gonna want to get back at 3DR for this. Really I now have a nasty feeling is isn't going to bode well for Duke's future.
Wonderful. NOT!!! Gearbox was the best studio other than 3D Realms to carry on with making Duke, and then this happens! Man I smell cooperate greed here and it sucks! I mean royally sucks. It's gotta be some kind of a record, 3DR is now officially the studio with the most lawsuits to it's name.
"Gearbox allegedly refused to make royalty payments to 3D Realms and allegedly refused to allow an independent auditor that 3D Realms hired to audit Gearbox's records, the complaint says." Dude, why? I sure that was went things started going downhill. Well folks it looks like total hell from now on between Gearbox and 3DR, I mean didn't most of 3DR's team re-locate to Gearbox? That cannot be good at all, I bet things are now tense as all hell over there now.
Still Scott once said something like "We're always innocent" when it comes to lawsuits, so either they pull through, seriously damaging the best business relationship, or the steak get broken by Gearbox who I have to say are looking better here.
#25 Posted 13 June 2013 - 10:13 AM
As a gamer who grew up playing many of Apogee's games (I wasn't allowed to play Duke 3D when I was young, but I played plenty of Duke II), and as someone who sees a lot of talent in Gearbox today, I hope all this stuff can end with as little bad blood as possible.
... and I hope so too, but doubt it. Once layers are involved it's too late.
@ Tea Monster - to fail is normal, Gearbox issued a lot of hits, but got a bit sloppy with 'brand' names.
#26 Posted 13 June 2013 - 10:26 AM
Because lore is not what makes a videogame's foundation.
#28 Posted 13 June 2013 - 11:23 AM
Just letting everyone know in case a bunch of zero day accounts come in and start posting in this thread.
This post has been edited by You: 13 June 2013 - 11:24 AM