Frogwares, the developer behind The Sinking City and the Sherlock Holmes game series, has explained why The Sinking City has been removed from sale across multiple platforms, accusing publishers Bigben Interactive and Nacon of repeatedly breaching contract, withholding at least €1 million in royalties, falsely implying ownership of the IP, and more.
In a lengthy open letter, a Frogwares spokesperson explained that, in 2017, the company signed a licensing agreement with Bigben (which subsequently merged with and became known as Nacon) in which the publisher would sell and commercialize The Sinking City, with Frogwares retaining the intellectual property. Frogwares has provided IGN with documents from the 2017 agreement that make clear that the developer retains ownership of the IP. That deal would see Frogwares earn a revenue share on sales of the game, with additional payments for a series of production milestones.
During production, Frogwares alleges that Bigben/Nacon repeatedly paid for those production milestones around 40 days later than agreed, with formal notices for payment served by the developer on several occasions. The developer also alleges that Bigben/Nacon demanded that it be given the source code for the game and, when Frogwares didn’t comply (as the terms of the agreement stated that the publisher only sell the game), stopped providing any payments for four months.
Upon the game’s release in June 2019, Bigben/Nacon reportedly canceled all previously approved milestone payments. Speaking to IGN, Frogwares CEO Wael Amr said that Bigben/Nacon attempted to cancel out any royalties owed by alleging “various imaginary damages.”
Upon this move, Frogwares began a legal battle against Bigben/Nacon in August 2019. After the initial lawsuit began, the publisher restarted sending income reports, which Frogwares says were “incomplete and undocumented”, meaning the developer couldn’t correctly calculate revenue, or even see how many units had been sold. One report allegedly explained that an unnamed console manufacturer had itself not paid royalties in 5 months – but that same console manufacturer had paid royalties, during that period, directly to Frogwares for its other games.
Frogwares says that Bigben/Nacon owes approximately €1 million in royalties. However, Amr adds that, “The one million is only the royalties declared by BBI / Nacon. We have questions and are suing over damages for at least €4.5 million additionally.”
Amr also tells IGN that, while it fully controls the Sherlock Holmes series of games, 2016’s Sherlock Holmes: The Devil’s Daughter remains licensed by Bigben/Nacon for another 9 months. Amr tells IGN that Frogwares has, “serious doubts over reports and royalties for this title since we found numerous mistakes over the 4 years of licensing.”
Alongside the alleged non-payments, Frogwares also claims that Bigben/Nacon attempted to create a perception that the game was not owned or created by the developer through various means, including:
- Removing Frogwares’ logo from the front of game boxes and store art, and listing the developer as a “Technical partner”.
- Buying Sinking City and Sherlock Holmes domain names without notifying Frogwares.
- Creating a Sinking City tabletop RPG without informing Frogwares.
- Listing The Sinking City as a Nacon IP when the company went public.
[poilib element=”quoteBox” parameters=”excerpt=We%20only%20have%20one%20goal%3A%20helping%20to%20banish%20bad%20practices%20by%20speaking%20freely%20about%20them%2C%20instead%20of%20remaining%20subject%20to%20the%20code%20of%20silence.”]In February 2020, PC game subscription service Utomik announced that it would begin to include the game in its subscription, despite Frogwares’ contract with Bigben/Nacon only including sales on Xbox One, PS4, Steam, and Epic Games Store. Frogwares says this amounts to game piracy, and blocked the move.
Amr tells IGN that, despite attempting to contact the publishers during this period, Bigben/Nacon hasn’t replied to any of Frogwares’ direct questions about any of these issues since July 2019.
On April 20, Frogwares moved to terminate its contract with Bigben/Nacon. The publisher reportedly attempted to block the termination by invoking French emergency laws set up to protect businesses during the COVID-19 crisis – a move that Frogwares says triggers a Force Majeure clause in the original contract and allows it to terminate for an entirely separate reason. Frogwares says a judge upheld that termination in July of this year.
That termination – and reported ongoing confusion among platform holders as to who was due the royalties on Sinking City game sales – led Frogwares to remove the game from any platform it doesn’t have an express agreement with.
Explaining the move, Amr tells IGN, “Platforms who signed an agreement with Frogwares only are selling the game with our permission. That includes Origin and Gamesplanet. The platforms which BBI / Nacon had temporary commercialization rights [PlayStation, Steam, more] are the ones where delisting has had to occur either by us or by the platforms themselves when they could not get clarity on who owns the game now.”
Many had noticed that The Sinking City had been removed (something Frogwares has acknowledged previously) but this marks the first time the developer has spoken out on why. The developer explains that it wants the game to become available on those platforms, but offers no timetable for when that could happen.
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I asked Amr how the company had been affected by Bigben/Nacon’s alleged non-payments:
“It’s impossible for such situations to not have some affect on development or morale. So much time and effort that could be spent on more productive things has gone into fighting these issues. Furthermore, we didn’t try to hide the situation from our development team so they were aware of it throughout the process.
“In all honesty this has been going on for years though. The culmination was during the summer of 2019 were we were simultaneously attacked by Focus Home Interactive who delisted 9 of our store listings, cutting off a major source of our revenue and then by Nacon who refused to report and pay millions of euros in owed royalties.
“But we fought back and Frogwares is quite meticulous in terms of finances and so we accumulated a strong cash autonomy over our 20 year existence. We’re surviving and will continue to try our best every time. So despite all this, we’re going to try to celebrate our 20th birthday with pride and determination and just hope we’ll continue to find the support of the players with our current and next titles.”
As for why it’s chosen to make this such a public feud after so long, Frogwares ends its letter by saying:
“It is a shame that in such a creative industry there is so much energy wasted because of such practices. That’s why we decided to write this open letter. We hope that this transparency 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.”
IGN has contacted Nacon for comment.