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Take-Two Alleges Offshore Banking Shenanigans at 3D Realms

| 15 Jun 2009 23:28
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Take-Two Interactive has accused 3D Realms of having "substantial" amounts of money stashed in an offshore account, presumably to keep it hidden and immune from any consequences arising from the studio's failure to deliver Duke Nukem Forever.

In documents originally filed in mid-May, Take-Two revealed that it had asked Apogee Software - better known as 3D Realms - if the studio could "co-develop" an Xbox 360 version of Duke Nukem Forever. Apogee would only agree to do so, however, if Take-Two agreed to "fully fund Apogee's reaching certain milestone," which in the light of more than a decade of delays in the PC version the publisher was hesitant to do. It offered to fund half the costs of concurrent development of the PC and Xbox 360 versions of the game up to the "Alpha Milestone" of the PC version, and then fund the rest of the game development once it was completed.

Despite being contractually obligated to complete and deliver Duke Nukem Forever on the PC anyway, Apogee declined the deal. Take-Two claims in the lawsuit that its subsequent decision to develop the game independently has been stymied by the refusal of 3D Realms to hand over the source code and other materials relevant to the game.

Further, Take-Two said it is concerned that former members of the DNF development team, angered by their surprise dismissal, may leak proprietary information about the game "in an effort to obtain recognition for years of prior work on the DNF project, to improperly sell the information to a third party and/or to retaliate against Apogee," which could potentially harm Take-Two's exclusive rights to "publish, exploit and control the DNF brand." The suit specifically cites the case of Tramell Isaac, formerly the art director on the project, who posted unreleased DNF renders on his personal blog.

But the most interesting claim in the lawsuit is this: "Notwithstanding Apogee's consistent assurances that it would soon complete development of DNF, on May 6, 2009, Apogee closed its studios, terminated development of DNF and laid off all employees who had been involved in the DNF project. Upon information and belief, Apogee has title to a substantial amount of funds deposited in an off-shore account, which Take-Two believes Apogee can use to fund its outstanding obligations." [Emphasis mine.]

A year ago, the suggestion that Apogee was stashing Duke Nukem Forever development money in an offshore bank account could have been the punchline for any of a number of webcomics. Today, it doesn't seem so far-fetched. It'll be a shame if this is settled out of court, even though it most likely will be; I'd love to know if Take-Two's allegations are correct, and if so, just how much money Apogee has socked away over the years.

One other interesting point: In spite of the drama, it doesn't sound like Take-Two is quite ready to walk away from Duke Nukem Forever just yet: The publisher is seeking an injunction that "compels Apogee to reasonably cooperate in good faith with Take-Two in the development of the console versions of DNF." A full copy of Take-Two's complaint is available at FileShack. (PDF format)

Source: Shacknews

Disclosure(s): Strauss Zelnick, Chief Executive Officer and Chairman of the Board of Directors of Take-Two Interactive Software, Inc., is the head of ZelnickMedia, an investor in both Take-Two and Defy Media, LLC, our parent company. This article was published without approval or consent of ZelnickMedia or Take-Two.
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