Duke Nukem developer 3D Realms has issued a statement clarifying its side of the story in what has become an ongoing saga concerning its apparent closure, the cancellation of Duke Nukem Forever and a lawsuit filed against it by Take-Two.

“Despite rumors and statements to the contrary, 3D Realms (3DR) has not closed and is not closing,” the studio declared in a release today. “Due to lack of funding, however, we are saddened to confirm that we let the Duke Nukem Forever (DNF) development team go on May 6th, while we regroup as a company.”

Describing itself as a “much smaller studio now,” 3D Realms expressed a desire to “continue to license and co-create games based upon the Duke Nukem franchise.”

The statement went on to address the allegations Take-Two has made against 3D Realms in a recent lawsuit. While Take-Two claims that it’s $12 million in the hole thanks to Duke Nukem Forever, 3D Realms counters that Take-Two never paid any funds related to Duke Nukem Forever until last July, when they put in $2.5 million in a deal connected to an unannounced game. “This is the sum total Take-Two has paid 3DR in connection with DNF,” the statement said. Meanwhile, 3DR claims that it poured $20 million into the development of DNF.

3D Realms also revealed its take on the last months of Duke Nukem Forever‘s years-long development. According to 3DR, the studio began negotiations sometime late last year with Take-Two for more funding to finish DNF. Around this time, the studio was “hitting mutually agreed milestones” despite the lack of an established agreement. Allegedly after “months of negotiations,” Take-Two suddenly changed the terms of the proposed agreement to a point where 3DR couldn’t afford to sign on. 3DR would have to let the DNF team go if they couldn’t come to an agreement with Take-Two.

Take-Two then made a move to acquire the Duke Nukem franchise and the 3DR team. According to 3DR, the offer was unacceptable since it lacked any money upfront and had no guarantees of mininum payment or finishing DNF. 3DR “viewed Take Two as trying to acquire the Duke Nukem franchise in a ‘fire sale.'”

Negotiations, 3D Realms claims, fell through on May 4. News broke of the 3D Realms closure two days later.

Shacknews has the statement in full here.

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