Update: Nacon have said they "emphatically" reject Frogwares' open letter, claiming they are attempting to "discredit Nacon in the eyes of the public and professionals alike". Read the full statement below.
Over the last few months, The Sinking City has been disappearing from digital storefronts. In an open letter published today, the game's developers, Frogwares say they've been going through legal disputes with publishing company, Nacon (formerly Bigben Interactive), over funding and copyright issues with their Lovecraftian RPG.
Frogwares allege that Nacon missed payments to the devs during the game's production, and wrongly tried to claim copyright of it after its release. On top of that, the developers claim Nacon owes them "roughly 1 million euros" (around £900,000) in unpaid royalties, after collecting revenue from the game's sales on Frogwares' behalf.
"In 2017 we signed The Sinking City contract as a licensing agreement with BigBen/Nacon, two years after the start of production. In exchange for a financial contribution to the development, we gave them the right to sell and commercialize the game on 4 platforms - Xbox One, PS4, Steam and later, Epic Games Store. The intellectual property would still belong to Frogwares, which has always been the only producer and owner of its games, including The Sinking City," Frogwares' statement reads.
"We signed the deal on those terms and we would receive part payments for each production milestone completed. Then a share of revenue starting at the first euro or dollar."
According to Frogwares, however, this agreement was not properly honoured.
During the rest of The Sinking City's production, Nacon were allegedly "hundreds of days behind in payments", with Frogwares claiming to have issued the company multiple formal notices to get the money they were owed. They also claim that Nacon asked them to provide a competing game developer with the source code of The Sinking City. Frogwares refused this, as they say Nacon were only the licensee for the game, meaning they were to sell it, not "develop and co-create it".
"After we refused to comply, we stopped receiving financial contributions for over 4 months," they say.
After The Sinking City launched on June 27th last year, Frogwares say they received a letter from Nacon telling them that the game's milestones (major events during a game's development to track progress) that were previously approved were being cancelled, "meaning that we would not receive any profit from the sales of the game", they write.
"A retroactive cancellation on not delivering a product on time that is already out in the market is not acceptable. That was when our legal battle began. "
Frogwares filed a lawsuit against Nacon last August. Following this, they claim they received "incomplete and undocumented" income reports from Nacon, and noticed that the copyright info on various storefronts had changed to imply that Nacon (or Bigben Interactive, at the time) were the legal owners of the game. Not only that, but Nacon allegedly bought multiple domain names for Frogwares brands (for The Sinking City and their Sherlock Holmes games), as well as released a Sinking City tabletop game without informing Frogwares at all.
After 11 months trying to resolve these alleged issues with Nacon, Frogwares tried to terminate their contract with the licensee outright on April 20th this year. This turned out not to be that simple, though, as the devs say Nacon claimed the contract couldn't be terminated because of French emergency laws put in place to protect businesses during the Covid-19 pandemic.
However, this in turn triggered a separate article in Frogwares' contract recognised in court, allowing them to terminate their agreement with Nacon "in case the parties could not minimize the effects of an Event of Force Majeure on this agreement for a period of 60 days."
Despite their contract being legally terminated as of July 17th, Frogwares claims that Nacon have not formally acknowledged it. They're allegedly still owed around one million euros by Nacon, and claim the company "has created a perception that it is they who still own The Sinking City."
As a result of all of this, some storefronts have delisted The Sinking City themselves due to, what Frogwares believes, is confusion or caution over the game's ownership. The developers themselves have also removed the game from remaining stores to try to stop any further sales going to Nacon.
We've contacted Nacon for comment, but did not receive a response at the time of publication.
Update: Nacon have since given a statement to Kotaku, rejecting Frogwares' account:
"A dispute between Nacon and Frogwares over the interpretation of the 'Sinking City' video game publishing agreement is pending before French courts. A decision is not expected for several months. However, Frogwares thought it necessary to anticipate the upcoming ruling by issuing a press release on their website and Twitter feed, which reflects a personal and erroneous interpretation of the content of the agreement and the nature of this dispute. Nacon emphatically rejects this open letter, the terms of which do not square with the facts. Frogwares is seeking to discredit Nacon in the eyes of the public and professionals alike (even going so far as disclosing confidential information!) and to jeopardise the distribution of 'The Sinking City', the development of which was principally funded by Nacon. This behaviour, unworthy of any professional, is unacceptable and Nacon intends to take legal action so as to get them convicted and obtain redress. Nacon is confident about the outcome of the dispute, irrespective of the tricks used by Frogwares to cause them harm."
Frogwares say they've revealed this info in the hopes that it will "help everyone to be aware of what is really going on behind the scenes."
"We only have one goal: helping to banish bad practices by speaking freely about them, instead of remaining subject to the code of silence. We know that we are not the only ones in this situation. This is our way to bring a stone to the building to make the videogame industry more ethical."
Frogwares are hoping to get The Sinking City back onto stores. But for the time being, you're still able to buy it on their website, or through Gamesplanet. Here's our The Sinking City review if you'd like to find out more about the game.