Ukrainian studio Frogwares accuses a publisher of a €1M debt

Ukrainian studio Frogwares, which develops the popular Sherlock Holmes series of games, has announced problems with the publisher. Due to this, it removed its latest Lovecraft game, The Sinking City, from Steam, Epic Games Store, and other platforms, as reported in the company’s statement.

In short, according to the studio, it removed the game from stores itself due to a long conflict with the distributor.

According to the company, the full story goes like this.

In 2017, the studio signed a licensing agreement with the publisher BigBen/Nacon for The Sinking City. Under its terms, the publisher had to financially contribute to development, in return for receiving the right to sell the game on four platforms: Xbox One, PS4, Steam, and Epic Games Store. The intellectual property for the game belonged to Frogwares.

The studio had to receive funding for each stage in development achieved, and after release – a share of the revenue. But BBI/Nacon consistently delayed payments, as reported by the company. Then, the publisher bought a rival studio, which also made the Lovecraftian game, and demanded access to the sources for The Sinking City. After the access was denied, the publisher stopped paying the money.

After the release of the game on June 27, 2019, the studio received a letter from the publisher stating that it did not meet the set goals, so it would not receive a share of the revenue. In August 2019, the studio filed a lawsuit against the publisher.

At the same time, the publisher removed the studio’s logo from some marketing materials (including game covers), bought domain names for the Sherlock Holmes series and The Sinking City without notifying the developer.

And when the publisher went public, the official records stated that The Sinking City was its property. Although the studio did not transfer the rights to the game.

Due to these and other problems, the studio terminated the contract with the publisher on April 20, 2020. The latter disputed this, citing the French legislation to protect businesses during the coronavirus pandemic. On July 17, 2020, the publisher litigated against the termination of the contract, but it was to no avail.

Now, the studio estimates that the publisher owes Frogwares about €1 million for the sales of the game. To prevent the publisher from further profiting from the game, the studio has removed The Sinking City from some platforms.

Players who want to buy the game are offered to purchase it from the developer’s website, or on Origin, Gamesplanet, and Nintendo Switch.

These are not the first studio problems of this kind. In 2019, the company accused its former distributor, Focus Home Interactive, of trying to block its projects in major stores that sell PC games.