Usually in the gaming world, one hears news about gaming companies getting dragged to court over games by people who are not from the world of gaming. However, it seems that this time around two big gaming firms will go head to head in the court as developer Silicon Knights has filed a lawsuit against Epic Games for breach of contract, fraud, and several other tort claims in federal court in Greenville, North Carolina.
The lawsuit alleges that Silicon Knights has lost revenue as a consequence of the significant delay in developing its video game for the Xbox 360 called Too Human. The lawsuit also says that the Unreal Engine 3 did not work as Epic represented it would and furthermore, Epic has been unable or unwilling to fix.
Denis Dyack, President & Founder of Silicon Knights said, “Our strong preference is to focus on making games, not be in court. Unfortunately though, as explained in our lawsuit, we have had extensive problems with the Unreal Engine 3 that Epic has been unwilling or unable to rectify. For more than a year, we have been trying to reach an agreement with Epic to resolve these issues without resorting to litigation, but were unable to come to reasonable terms with Epic. Regrettably, we are now forced to go to court in order to achieve satisfaction. We remain hopeful, however, that we can reach a reasonable business resolution with Epic at some point.”
Furthermore, the lawsuit by Silicon Knights stated that Epic in fact never intended to deliver Unreal Engine 3 as a fully functional game engine as promised. Not only that, Epic collected licensing fees from Silicon Knights and others with the intention of funding the development of its own video game, Gears of War.
Dyack later added, “No doubt Gears is a fun and phenomenally successful game, but as we alleged in our complaint against them, we strongly believe that from the perspective of someone waiting for a game engine that Epic promised it would deliver almost two years ago, it seems pretty clear that Gears was built on the backs of the Unreal Engine licensees. We certainly stand by our allegations in the lawsuit that instead of using our licensing fees to develop and support the Unreal Engine 3, Epic used that money to build Gears.”
However, Epic Games has now mailed and confirmed that they are involved in a legal battle with Silicon Knights. Mark Rein, President, Epic Games wrote, “This morning we were served with a lawsuit by Silicon Knights. We believe the claims against us are unfounded and without merit and we intend to fully defend against them. We’d love to tell you more about it but unfortunately our lawyers want us to save our comments for the courthouse so we’re going to do our best to comply with their wishes. In that vein we’d appreciate if our friends in the industry and media would refrain from asking us about the suit because we’re only going to say ‘no comment.’ We just wanted to share the news directly before the rumor mill starts churning.”
It seems that this tangle is going to go for a very long time. Mostly court battles like these go on for years and years and some of them are even settled out of court. But then there is a huge amount of money involved! It remains to be seen whether Silicon Knights and Epic Games will do something like that. Keep watching this space for more details.