Breaking: Silicon Knights Files Lawsuit Against Epic

[Scott_Arm]

Related questions:

Do you think this means SK has somewhat given up on the game?
If the game is released, do you think this is a sign that it won't be a quality title worth buying?

 

[Scott_Arm]

Another question:

Has anything like this (A high profile engine licensor being sued) happened before?

 

[Tim Murray]

Related questions:

Do you think this means SK has somewhat given up on the game?
If the game is released, do you think this is a sign that it won't be a quality title worth buying?

No. I think that it could be used as a justification for a delay (probably a good one, if they had to rewrite the UE3 renderer from scratch), but I don't think the game is vapor. Microsoft seems to have put too much money into it for that to happen at this stage.

Another question:

Has anything like this (A high profile engine licensor being sued) happened before?

Not that I know of. If it goes badly for Epic, it might be the end of them. If SK wins (or even gets a large settlement), you'll see every other UE3 licensee go after them as well.

 

[pakotlar]

No. I think that it could be used as a justification for a delay (probably a good one, if they had to rewrite the UE3 renderer from scratch), but I don't think the game is vapor. Microsoft seems to have put too much money into it for that to happen at this stage.

Not that I know of. If it goes badly for Epic, it might be the end of them. If SK wins (or even gets a large settlement), you'll see every other UE3 licensee go after them as well.

I doubt that they would go under from this and any sort of cascading effect from their licensees. Of course this depends on how badly they screwed up with the builds that were licensed, what they promised in the agreements, and how many devs got burned.

But yes, in the very worst case scenario, Epic will, at the very least lose a lot of money.

 

[pakotlar]

Related questions:

Do you think this means SK has somewhat given up on the game?
If the game is released, do you think this is a sign that it won't be a quality title worth buying?

Who knows, a bit OT though. SK has written their own engine for this game now btw.

 

[Tim Murray]

I doubt that they would go under from this and any sort of cascading effect from their licensees. Of course this depends on how badly they screwed up with the builds that were licensed, what they promised in the agreements, and how many devs got burned.

But yes, in the very worst case scenario, Epic will, at the very least lose a lot of money.

Let's imagine this goes to a jury trial. SK's lawyers convince the jury that Epic was grossly negligent. SK gets their wish and gets at least a large chunk of GoW profits. That, coupled with the cascading effect of all other licensees suing Epic, would probably destroy them.

And again, nobody knows what UE3 code TH is using at this point. It could be totally in-house, or it could be the UE3 framework with a new renderer.

 

[MJP]

I would think that no matter what this will have some very negative consequences for Epic. Even if they win the lawsuit in the end, I would think the lawsuit would introduce some doubt into the mind for anyone currently considering obtaining a license.

Time to capitalize, id!

 

[Tim Murray]

Time to capitalize, id!

I imagine the business guys at id are cackling with glee right now. "You mean... our engine fixes exactly the problems that everyone is having with UE3? Blehehehehe!"

 

[Scott_Arm]

The game industry has grown rapidly, and I think a lot of software companies, in general, still have a start-up mentality. Whatever the decision, I think this is going to dramatically change the way companies license out their software.

For instance, in the telecom industry, a lot of deals are signed where deadlines are enforced with stiff daily financial penalties. You might see those kinds of demands from licensees in the software industry to prevent this type of thing from happening.

 

[dobwal]

No. I think that it could be used as a justification for a delay (probably a good one, if they had to rewrite the UE3 renderer from scratch), but I don't think the game is vapor. Microsoft seems to have put too much money into it for that to happen at this stage.

Not that I know of. If it goes badly for Epic, it might be the end of them. If SK wins (or even gets a large settlement), you'll see every other UE3 licensee go after them as well.

I think if SK wins they probably recover some license and lawyer fees. Proving that Epic intentionly delayed the release of a full engine to give Gears a marketing advantage is going to be hard. They must first prove this to recieve any compensation from the delay of TH as Epic/SK contract for use of U3E doesn't make Epic responsible for the financial well being of SK unless Epic intently tried to harm SK through its actions.

 

[Tim Murray]

I think if SK wins they probably recover some license and lawyer fees. Proving that Epic intentionly delayed the release of a full engine to give Gears a marketing advantage is going to be hard. They must first prove this to recieve any compensation from the delay of TH as Epic/SK contract for use of U3E doesn't make Epic responsible for the financial well being of SK unless Epic intently tried to harm SK through its actions.

Well, they're saying that some time after Gears came out, basically all of the Gears code was released to licensees. That is certainly not a good thing for Epic's claim that Gears contained only game-specific enhancements.

 

[scooby_dooby]

Let's imagine this goes to a jury trial. SK's lawyers convince the jury that Epic was grossly negligent. SK gets their wish and gets at least a large chunk of GoW profits. That, coupled with the cascading effect of all other licensees suing Epic, would probably destroy them.

Well UT2007 should generate some pretty huge profits, and GOW2 is gauranteed to make as much money, or more than the original, so they should be ok...

 

[Tim Murray]

Well UT2007 should generate some pretty huge profits, and GOW2 is gauranteed to make as much money, or more than the original, so they should be ok...

I think you may be underestimating the size of these licensing deals. If Epic has to basically repay everyone who used UE3 and then pay damages on top of that, they're going to be in a world of hurt.

 

[dobwal]

I would think that no matter what this will have some very negative consequences for Epic. Even if they win the lawsuit in the end, I would think the lawsuit would introduce some doubt into the mind for anyone currently considering obtaining a license.

Time to capitalize, id!

It will probably prompt anyone doing business with Epic to have more detailed contract language to prevent any conflict of interest on Epic's part.

"Like any updates made to unreal engine or program integrated for use with unreal engine of a Epic game being currently developed must be provided to licensee for use."

Thats probably gauranteed whether SK wins or not.

 

[valioso]

I think you may be underestimating the size of these licensing deals. If Epic has to basically repay everyone who used UE3 and then pay damages on top of that, they're going to be in a world of hurt.

didn't they say it was 1 million per license?

 

[Bouncing Zabaglione Bros.]

Let's imagine this goes to a jury trial. SK's lawyers convince the jury that Epic was grossly negligent. SK gets their wish and gets at least a large chunk of GoW profits. That, coupled with the cascading effect of all other licensees suing Epic, would probably destroy them.

I would be quite surprised if it goes to court. I expect there to be a lot of blustering, and then some behind the scenes settlement that neither party will talk about. Going to a full trial is very expensive, and is effectively the nuclear option. Even if you win, you can end up doing nothing more than filling the lawyers' pockets.

The only way I can see it going all the way is if the people at the top of SK really feel they have been screwed by Epic, and already fear for their business without clawing back the money they lost from paying for a product they can't use, missing deadlines and sales, having to accept being screwed over in their contract with MS for an extension.

It does say something that a licensee of one of the premier engine suppliers feels they need to go this route, and that they've already got as far as publicly filing a lawsuit. This isn't just some speculating class action ambulance chasing, this is one of Epic's long-term customers pressing the big red button in a way that no company ever wants to do, especially in such a public way.

 

[Tim Murray]

didn't they say it was 1 million per license?

I don't think it's a fixed fee like that. It might be one million plus a share of the game's profits, but I think it's negotiated on a per-game basis.

And yes, BZB, I don't think this will ever end up in court. But... considering that they went so far as to file this, I wouldn't be too surprised if SK does take this all the way.

 

[Bouncing Zabaglione Bros.]

I imagine the business guys at id are cackling with glee right now. "You mean... our engine fixes exactly the problems that everyone is having with UE3? Blehehehehe!"

It was very interesting to see that the recent Tech 5 demonstration by ID wasn't "dude, look at our kewl graphics", it was all about how easy and simply multiplatform interoperability was working, how simple cross platform content generation was working, etc. ID were basically selling Tech 5 as building one game, and having it seamlessly run on three platforms.

 

[Scott_Arm]

Unfortunately, I think this type of thing will happen more often now. I'm surprised it hadn't happened earlier. The budget for these games is reaching that of small movie productions. If you get stiffed and and push your release by even a few months time, that could push your budget up dramatically.

 

[Tim Murray]

It was very interesting to see that the recent Tech 5 demonstration by ID wasn't "dude, look at our kewl graphics", it was all about how easy and simply multiplatform interoperability was working, how simple cross platform content generation was working, etc. ID were basically selling Tech 5 as building one game, and having it seamlessly run on three platforms.

If that was Carmack's baby, the guy is still a visionary. I wondered if his run was over after Doom 3's failure (compared to his previous engines), but that seems to not be the case.