The Sinking City – The legal dispute between Frogwares and Nacon continues!

On June 27th, 2019, The Sinking City was released on multiple platforms, including Steam. Then there’s been a bit of an issue between the developers and their “publisher”, which lead to it being delisted and eventually the matter being taken to court. Alas, I figured I should talk about it since it now is being stirred up again.

First things first. The Sinking City is an action-adventure game developed by Frogwares, the creators of Call of Cthulhu. It is inspired by H.P. Lovecraft’s stories and set in the fictional city of Oakmont, Massachusetts, during the 1920s where the private investigator Charles W. Reed searches for clues to the cause of the terrifying visions plaguing him and the mystery of Oakmont’s unrelenting flooding. The game was announced in 2016 with footage eventually shown in 2017, and the game getting released in 2019 as a timed exclusive on the Epic Games Store. Nacon (formerly known as BigBen Interactive) was licensed as a distributor until 2020 but pretended to be more than that, aka a “publisher”. Their contract with Frogwares on account of both intellectual property violation and lack of payment, which is why the game was delisted from Steam, the EGS, as well as the XBOX One and PlayStation 4 digital storefronts until the legal dispute between the two parties was done. In exchange for a financial contribution, Frogwares gave Nacon the right to sell and commercialize the game on four platforms, but the intellectual property would still belong to the only producer and owner of this game, Frogwares. The deal was signed and payments were to be received for each production milestone completed. On top of that, there would be a revenue share in place starting from the first dollar earned.

According to Frogwares who addressed this in an open letter, “BBI/Nacon was hundreds and hundreds of days behind in payments in total”, followed by BBI/Nacon buying out a competing studio working on another Lovecraftian game and demanding that Frogwares would give their source code for The Sinking City to their competitor. The problem here is that they don’t really have the right to demand anything like that since they do not own the IP. When Frogwares refused, BBI/Nacon stopped financial contributions for over four months. Nacon would also not deliver any consistent sales figures or business plans and otherwise refuse to collaborate. Eventually, the game was released and despite them approving of all the previous milestones, they refused to pay up or give Frogwares the shares they deserved. They didn’t document sales figures or any other data on how many units were sold. At the same time, they would make up things about console manufacturers not having paid royalties for more than five months, despite the same manufacturer paying up without delay during that time for Frogwares’ other games. Hence, Frogwares went to court.

On top of not paying up or contributing financially, Nacon also has been still earning money from the release. While not holding their end of the deal, they profited from the game while pretending to be the publisher and owner of the IP and game. They listed Frogwares as a technical partner while removing any proof of their involvement in the game on all boxes, packaging and other material, resulting in them creating this illusion of them being the owners of the IP. The contract between the parties was then supposed to be terminated as a result of the court case but Nacon is refusing to accept that. Nacon also refused to take the games down and to pay up, so the matter wasn’t ending anytime soon. Frogwares’ only option was to take the game down via a DMCA notice on multiple occasions. Nacon then tried to still sell the game as their own property on multiple occasions by buying one copy of it, then hacking the game’s source code and editing it in a way that suggests that it’s owned and created by Nacon and not Frogwares. Then they started re-distributing it on Steam and other platforms. Features like achievements would be missing since the game would only be offline. Logos by Frogwares were removed or changed and overall, the game would behave differently.

Frogwares also explained that they purchased the Deluxe Edition from their store and then released the altered version of that copy on Steam, which is a further breach of their contract. They didn’t pay them for any of the previous game but even if they had and were still contracted to them, they wouldn’t have been able to profit from the extra content and DLC offered in the Deluxe Edition, hence essentially pirating/stealing that extra content from Frogwares. Obviously, the game was taken down, yet again, on Steam but Nacon seems to continue the attempts of theft, robbery and profit from the game, despite not having any right to do so at all. They even launched the game at a 60% discount, to make as much money as possible before it would be taken down, which is ridiculous, to say the least.

Now, Nacon actually responded to this publicly just recently, saying that they are “contractually the sole exclusive distributor of The Sinking City on Steam”, but the court decided in favour of Frogwares that the contract is terminated. Nacon then denies all of the allegations, saying that they paid all of the financial contributions and the payment of royalties to Frogwares in time, accusing Frogwares to act in bad faith and saying that they have no right to make the game available to Nacon on Steam. What’s truly evil is that Nacon is actually turning it the other way around saying that the court has decided in their favour and prompted the continuation of the contract, while pulling quotes of their butt. According to Nacon, Frogwares tried to sell the game again on Steam without mentioning Nacon at all (an incident of which I know nothing of as I can’t find any sources… hmmm….). Now, Nacon is threatening with legal action as well, saying that Frogwares has apparently not indicated that “all court decisions in the dispute between Nacon and Frogwares have thus far been favourable to Nacon”.

The issue with this is that to make a lie seem true, you mix in a bit of the truth. They mentioned that Frogwares encouraged the gaming community via Twitter to not buy the game, which is true. There is proof of this… but Nacon doesn’t provide any truth at all towards their accusations here. Meanwhile, Frogwares showed the changes made in the most recent version on Steam in a video, which I’ll link below, and they provided sources and proof to everything they mentioned in their open letter. Frogwares doesn’t pull up any quotes or anything that the court apparently said out of their arses, they actually show parts of the contract, screenshots and other proof to make you believe them, while Nacon is just pulling the “Uno Reverse Card” here by saying that Frogwares is lying. 

Frogwares: “Nacon stole our property, didn’t pay us in time, is still not paying us, isn’t in a contract with us anymore and has yet to pay us, and they now are trying to profit off our IP without any right to do so while pretending to be the creator of the game.” – Nacon: “No, you’re lying. We’re right. Shut up.”

I don’t get why people are still so endazzled with Lovecraftian Horror when Corporate Horror is so much scarier. Nacon here, an evil corporation, is also trying to sway over people by pretending to be the only ones that made this game possible through their financing and support, when in fact, they started giving money to Frogwares after two years of development, and they stopped giving money to Frogwares after Frogwares denied them to incorporate Frogwares’ source code into a different studios’ game, which is ridiculous. Nacon is like an orange man-child of a Giant that has too much money and power while Frogwares is the tiny David trying his best to deal with this endless legal trouble. Eventually, Nacon gave Frogwares a 48-hours ultimatum to produce a functioning version to them so they can sell it on Steam or else they would “use all solutions available within the law and the contract”… so piracy is within the law, I guess, as they stole the game and started selling the altered version of it. Counterfeit, intellectual theft, piracy, and threats are apparently within the law and the contract (that btw is still breached). 

And I thought that Epic Games was evil but I guess there’s always someone worse out there. Nacon even tried to breach the exclusivity agreement that Frogwares and Nacon had with Epic Games by publishing the game on a different platform. While Frogwares didn’t know how many units were sold, how much money they would make and whether or not the revenue share was accurate on Steam (since Nacon didn’t provide any real documented sales figures), the minimum payment agreement in the Epic Games contract that actually gives developers a minimum amount in case their game doesn’t sell too well, would have been a lifeline. This is a wild guess and purely based on speculation… but what if… WHAT IF… Nacon tried to sabotage Frogwares on multiple occasions to tear them into ruins and disable them to make money to eventually buy them up like the competing company mentioned above. That’d be stupid, right? But what if Frogwares hadn’t delivered the game due to the lack of payments? Well, Nacon would have gone to court and probably won because they’re an evil corporation and they have money. This court case is already turning into a really long battle between the two but I’m not sure how Frogwares will hold up against Nacon. I don’t get why Nacon is trying so hard to get a two-year-old game back to Steam. I don’t have a huge understanding of business practices but I feel like they’d lose out on that, big-time… the only real idea that crosses my mind is that they want to buy Frogwares after wearing it down slowly and potentially bringing them to ruins. Wear them down, crush them, buy them, rebuild them, make money. Maybe that’s it? But I doubt that… again, it’s all speculation and it’s super silly as well. 

Nacon published some games that I have in my library now… and honestly, I don’t like Nacon. I’m calling them evil over here and I even compared to Trump for whatever reason because this whole ordeal seems dumb and pointless, just like Trump’s era in the States. I don’t see a point in their refusal to just pay up and continue with the revenue shares they get from the game (if their contract is really still in place). I mean, according to them, the contract wasn’t terminated… so why don’t they just grow a pair and stop the legal bullying here. They go through such huge lengths to pirate that game and make little to no money off of it when they know that they’re only screwing themselves over it. 

Apparently, Nacon also has (according to them) the right to use a third party to deliver the game on Steam without Frogwares’ approval, according to their contract… but nobody’s showing the contract and Nacon doesn’t have a contract with Frogwares anymore, according to Frogwares. I believe Frogwares for the most part here since they are ready to show more proof than Nacon. Meanwhile Nacon is just doubling down on their stubbornness and continuing to bully and provoke Frogwares until they can win a court case of something. As seen in their press release, they’re not even trying to deny that they stole and hacked the game. Ridiculous!

Any thoughts? Let me know! I’ve been meaning to write about this for a while now but then I thought it was over… in 2019… but then it started up again and even though big sites have already covered it plenty of times, I figured that maybe some people may be interested in hearing about it and spreading the word. In case, you want to read up on more info regarding this… 

Here are the sources:
Frogwares’ open letter on the situation
Frogwares’ proof of Nacon’s piracy
Frogwares’ video (see the link on Nacon’s piracy and the video above)
Right of Reply from Nacon following Frogwares’ allegations
“The court’s decision” according to Nacon and this press release
Dates and names were taken from the most reliable source on the web
Pictures used for this blog post to make things prettier were taken from the gallery/press pictures

Alas, if you want to get the game yourself, you cannot do that on Epic Games, Steam, or the XBOX/PS4 digital storefronts since there’s this whole thing still going on and the contract between Frogwares and Nacon states that Nacon is the sole distributor on those fronts… However, Frogwares self-published the game for the Switch as well as on their own site (linked above) and on Gamesplanet, so you can get it over there.

Cheers!

This post was first published on Indiecator by Dan Indiecator aka MagiWasTaken. If you like what you see here and want to see more, you can check me out on Twitch and YouTube as well.

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