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Konami Drops Six Days in Fallujah_

Submitted by Sylvie Lang
Japanese video game publisher Konami has decided not to publish the controversial game Six Days in Fallujah, developed by Atomic Games. The game re-enacts the Second Battle of Fallujah which took place in late 2004 during the Iraq War. The battle caused considerable human and physical damage. From the onset, both anti-war and pro-military groups have criticised the game, saying that it was too soon after the War to release it. Six Days in Fallujah was developed in conjunction with US Marines who took part in the actual battle and is intended to give players a sense of what it was actually like to fight in the conflict. Atomic Games has not yet said whether it will try to find another publisher.
Coverage at Developmag
Coverage at Gamedaily
Coverage at Gamasutra
Coverage at LA Times Blogs

Empire Interactive Shuts Down

It has been reported that Empire Interactive, a U.K. based publisher of nearly two decades, is shutting down its operations. The closure has been announced to the employees located in its London offices while all other employees are currently being liquidated.

Approximately two weeks ago, KPMG, an administrator, was asked to find a purchaser for the enterprise. Although two potential buyers expressed interest, no deal was reached.

Coverage at GameDaily.com.

Scratch DJ Game Itching for Damages and Injunctive Relief

It has been reported that Scratch DJ Game ("Scratch"), a joint venture between Genius Products ("Genius") and Numark Industries, has filed a lawsuit against publisher Activision, former partner and game developer California 7 Studios ("7 Studios") and its CEO Lewis Peterson, claiming that Activision has "engaged in intentional interference with contract, breach of contract, conversion and misappropriation of trade secrets obtained from Genius to purchase 7 Studios, which is under contract to develop the much anticipated new Hip Hop video game, Scratch: The Ultimate DJ." Scratch has also alleged that Activision and 7 Studios have deliberately hindered the release of Scratch: The Ultimate DJ in order to allow the future release of Activision's own prospective game, DJ Hero, to grab the spotlight.

Scratch has explained that while Activision had offered Genius to acquire Scratch: The Ultimate DJ, this offer was refused. It is at that point that Activision began to look to purchase Genius' product developer, 7 Studios, despite a non-disclosure and confidentiality agreement with Genius. Scratch has also alleged that Activision and California 7 studios conspired to impede the release Scratch: The Ultimate DJ.

It is reported that Trevor Drinkwater, President and CEO of Genius, has stated that "We believe that Activision and 7 Studios have improperly used confidential information obtained from Genius and 7 Studios to interfere with our efforts to complete the game. In short, we believe that Activision is attempting to sabotage the release of our much anticipated game and prevent it from getting to market prior to the release of DJ Hero."

Apparently, Scratch is not only seeking damages, but also an order to have the game returned to it immediately, as well as other injunctive relief.

Meanwhile, in response to these allegations, Activision has reportedly issued a statement, denying that there is any truth to these allegations and claiming that the Los Angeles Superior Court "found that there was no evidence of any wrongdoing by Activision and refused to grant any restraining order against Activision." Activision has also claimed that Scratch has made these allegations "to place blame for the game's delay, as well as to divert attention from the cash flow, liquidity and revenue challenges Genius detailed in its March 30, 2009, SEC filing." Finally, Activision also claimed that it acquired 7 Studios to increase its development capabilities, which did not interfere with 7 Studios efforts to complete the game, as it provided much needed financing to the developer.

However, it has been reported that Genius and Numark have claimed that they were the ones to prevail in Court, rather than Activision. The transcript from the Los Angeles Superior Court hearing has been made public by the companies and although the judge began by stating that there was no evidence against Activision and no reason to restrain it from doing anything, the judge went on to say that 7 Studios "has a duty to return the work product, source code, and software of the plaintiff [Genius]." The judge then stated that Activision had to turn over the source code and should it want it back, that it could argue its case during a hearing set for May 6. The judge also ordered a wall-off between 7 Studios and Activision, preventing the two companies from sharing any trade secrets that 7 Studios may have learned from Genius.

The next step in the case is a May 6 hearing, regarding the damages that Genius is seeking.

Coverage at GameDaily.com, Gamasutra.com, GameDaily.com and Gamespot.

RETIRED NFL PLAYERS V. MADDEN AND ELECTRONIC ARTS?

GamePolitics has reported that the NFL players who won a $28 million dollar lawsuit last year against the NFL Players Association are planning on suing John Madden and Electronic Art over the Madden NFL series of games.

The retired players claim that Madden and Electronic Art used them in their games without compensating the players.

The $28 million dollar judgment against the NFL Players Association is being appealed to the 9th Circuit Court of Appeals.

Coverage at: GameDaily.com

Creditors Given Break in Midway Games Bankruptcy

Submitted by Sylvie Lang
On April 9, 2009 the Judge overseeing the Chapter 11 Bankruptcy of Midway Games ruled that creditors of the video game publisher have permission to investigate and pursue litigation against the company's owner, Mark Thomas in relation to the transaction that led Thomas to own a controlling stake in Midway Games. The permission gives creditors the right to investigate anyone else involved in the transaction, including the former majority stakeholder Sumner Redstone (majority owner of National Amusements Inc.) and Midway's former board of directors. At the same time, the Judge made another ruling that made unsecured creditors less enthusiastic - Midway is permitted continued access to the company's cash reserves. A statement filed in court by Thomas's holding company, stated that Midway could depleted all its cash by the end of this June, although the company's spokesperson has said publicly that they have enough cash to last until August and hopefully beyond.
It is reported that creditors are very suspicious of Thomas, particularly the manner in which he became the majority stakeholder of Midway. Little is known about Thomas, apart from the fact that he is a lawyer with no personal debt and assets worth $10 million. He purchased Midway for an extremely low price, less than a week after he was initially approached with the offer by National Amusements Inc. In November 2008, Thomas paid $100,000 for Redstone's majority stakeholder position, however four days earlier he had offered $1 million. Once the transaction was completed, Thomas had also acquired $70 million in debt, owed to Redstone's National Amusements Inc. $30 million of the debt is secured, making Thomas the first ranking creditor in the bankruptcy. Midway had been experiencing financial difficulties for several years. At the request of Shari Redstone, Sumner Redstone's daughter and chair of Midway's board, National Amusements Inc. lent the video game publishers over $90 million. Both Sumner and Shari claim to have no connection to Thomas.
Rumours abound that Warner Bros., Ubisoft and one other party may be interested in purchasing Midway.
Coverage at Gamasutra and Chicago Tribune