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randir14 06-13-2013 08:23 AM

3D Realms Suing Gearbox
 

PCGamesN reports that 3D Realms has filed a lawsuit against Gearbox over unpaid royalties for Duke Nukem Forever.

Quote:

In a breach of contract suit filed in Texas on Friday, 3D Realms claim that Gearbox have failed to hand over all the cash stipulated in the purchase agreement the two companies signed in 2010, when Gearbox bought the rights to Duke Nukem Forever.

What’s more, 3D Realms say Gearbox have blocked an independent audit of the royalties they’ve earned on the game - something the 2010 purchase agreement should prevent them from doing.

“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 reads.
Read more

brandonjclark 06-13-2013 08:34 AM

Fuck you George Broussard.

randir14 06-13-2013 08:37 AM

Original source:

Quote:

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.

ElektroDragon 06-13-2013 08:53 AM

How does 3D Realms continue to exist? I smell millionaire with deep pockets.

randir14 06-13-2013 08:57 AM

Quote:

Originally Posted by ElektroDragon (Post 2220243)
How does 3D Realms continue to exist? I smell millionaire with deep pockets.

They only have three employees still working there that I know of, and they hire other companies to make games (like Rise of the Triad and Duke Nukem II on iOS). Millionaire is correct, Broussard spent tens of millions of his own money on DNF.

UttiniDaKilrJawa 06-13-2013 08:59 AM

3D Realms said the deal was one among friends, as Gearbox's president had a long-standing friendly relationship with its principals.

This makes me think that Gearbox may have left out some details out of whatever contracts they signed with the ZD Realms. (not a typo, Z is Zombies thats good enough for me, because this studio is still alive long after it should be dead.)

Now Gearbox is manipulating those leftover details to their advantage.

UttiniDaKilrJawa 06-13-2013 09:00 AM

Super conundrum...who to root for?

Asshat 1 or Asshat 2.

Decisions...decisions.

Demo_Boy 06-13-2013 09:18 AM

Sounds like the deal was originally Gearbox pays $2.9 mill and some % of profits earned from duke games (forever and a sequel).

Now Gear is saying that the $2.9mill was an advance against royalties. That is completely different!!

Was is $2.9 + % royalties, or was it $2.9 Advance against royalties. This HAS to be wrote in the contract cut and dry.

It doesnt matter if the 2.9 that realms recieved was used to pay off a loan. That is Realms business. Not Gearbox's

Did Forever tarnish Gearbox's reputation? FOR SURE. But that is the responsibility of the Gearbox CEO to smell a bad deal and avoid it. Not Realms fault.

Not that I am sticking up for Realms because they are great guys or anything. But this is just business.

Demo_Boy 06-13-2013 09:21 AM

OTOH "It also contends that Gearbox should send it more than $500,000 in future advances it has received, "

this makes no sense: that advances paid to develop the sequel to forever should immediately be taxed by Realms?

I would think that the % royalties would be based only on the sales of the actual game. So once the sequel comes out, then the % applies against that. Not upon advances.

MasterEvilAce 06-13-2013 09:25 AM

Quote:

Originally Posted by brandonjclark (Post 2220238)
Fuck you George Broussard.

Why?
If an agreement was actually made, and it was not fulfilled, then 3DR has every right to sue.

No matter how much you hate George, if the lawsuit is true, he is just protecting himself.

davidj.dk 06-13-2013 10:15 AM

I am actually with 3DR on this one.. After A:CM it seems to me that Gearbox is an extremely shady business, and I will have nothing to do with them whatsoever..

Pay your god damn dues and stop being assholes.

Rommel 06-13-2013 11:41 AM

Royalties? The game dropped to $2.99 in like a week.

brandonjclark 06-13-2013 11:48 AM

Quote:

Originally Posted by MasterEvilAce (Post 2220253)
Why?

Why not? I'm tainted man. A big, bloody and tainted pussy.

Fuck that dude.

FOREVER.

Terran 06-13-2013 12:09 PM

Quote:

Originally Posted by Demo_Boy (Post 2220250)
Was is $2.9 + % royalties, or was it $2.9 Advance against royalties. This HAS to be wrote in the contract cut and dry.

Considering how long it took 3D Realms to get anywhere close to an unfinished game, perhaps their lawyer took a similar perspective with the legal papers?

"Yeah, we'll....leave the last few pages blank. You fill it in later, Gearbox. We can't get it done!"

:D

SaintBlitzkrieg 06-13-2013 12:23 PM

Wait wait wait... Duke Nukem Forever made enough money to squabble over? That is the bigger story here.

Sammael 06-13-2013 12:53 PM

I spent $10 on a copy. I had to see it.

I didn't like it. There wasn't a very good gameplay flow to it.

randir14 06-13-2013 01:42 PM

Statement from Gearbox:

Quote:

Ironically, Scott Miller himself provided the best response when he wrote: "... filed lawsuits are entirely one-sided statements, based on knee-deep BS and with more spin than a top."

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.
The ending is not really true, Apogee/3D Realms has shipped more games than Gearbox. Gearbox has also been hit with more lawsuits than 3DR when you take this into account:
http://www.ign.com/articles/2013/05/...lonial-marines

The only legal action I know of that was taken against 3D Realms was by Take-Two for failing to finish DNF.

Evil Avatar 06-13-2013 02:13 PM

Would this be the blind suing the stupid or the reverse?

Anenome 06-13-2013 02:25 PM

I'll side with someone who ships over the reverse. Broussard? You deserve no money.


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