News

Judge ruling deals Silicon Knights a serious blow in suit against Epic Games
Posted: 31.12.2011 00:11 by JonahFalcon Comments: 2
Chief District Judge James Dever III has dismissed Silicon Knight's key testimony in a lawsuit aimed at Epic Games, which has dealt a serious blow to the developer's case. The court lambasted expert witness Terry Lloyd's damage estimates, calling Lloyd "not qualified" and his testimonial "unreliable and speculative".

The testimony which was dismissed by the court was a six part cost breakdown on theoretical lost income due to Epic for allegedly failing to "provide a working game engine" for Too Human. Epic was accused of "sabotaging" Too Human for the sake of Gears of War.

Lloyd, a Certified Public Accountant and Chartered Financial Analyst, made the following estimates in his testimony:

* Lost royalties due to decrease sales ($6.2 mil)
* Lost publisher bonus ($750k)
* Lost ancillary royalties ($810k)
* Lost profits from sequels ($16+ mil for Too Human II, $14+ mil for Too Human III) and another Sega title, The Ritualyst ($8+ mil)
* Cost to develop a new engine ($2.3 mil)
* Economic harm to Silicon Knights' reputation ($8.9 mil)

These estimates for game engine development were tossed out, partly because publishers like Microsoft and Sega recoup those costs for the developer. Another sticking point was that Lloyd was listing theoretical games as future profits. Silicon Knights had blamed Epic for the long delay and poor sales, due to their pulling of the Unreal Engine 3 from the game.

Epic responded to this accusation with a counter-motion, arguing "Having exploited Epic's intellectual property to its advantage, Silicon Knights now seeks to renege on its payment obligations under the License Agreement. It is Silicon Knights, not Epic, that has engaged in deceit, infringement of Epic's intellectual property rights, breach of contract, and unfair business practices."

Silicon Knights recently laid off 3/4 of its staff, blaming Activision for cancelling a project the developer had been working on for it.
Source: Shacknews

Comments

By herodotus (SI Herodotus) on Dec 31, 2011
herodotus
Reading through all of this, Jonah really have just one word coming to mind: messy. Having an "expert" witness discredited by the Judge is never good, so it looks like more legal shenanigans will continue into '12.
I'll have to ask my brother-in-law about these cases, as he was a &D gamer (and PS gamer) before becoming one of Australia's leading corporate lawyers. He does a few cases along these lines.
By JonahFalcon (SI Elite) on Jan 01, 2012
JonahFalcon
Let us know - would be interesting to hear from a third party on this.