UPDATE (8/26/20): Nacon’s official response added at the bottom of the article.
Ukrainian developer Frogwares has pulled their 2019 title The Sinking City from various storefronts due to a legal dispute with their former publisher Nacon. In a statement on their website, Frogwares lays out the sequence of events that led up to the game’s release and all the issues which were happening behind the scenes. The result has led to Frogwares pulling the game, claiming Nacon owes them approximately €1 million in royalties.
According to Frogwares, the contract which was laid out defined payouts for milestones, revenue shares, and unequivocal ownership of the IP residing solely with Frogwares. Nacon was to be supplying funds for milestones as they were hit, and they would have the right to sell the game while providing a cut of the sales revenues to Frogwares. Allegedly, Nacon was consistently late disbursing the milestone funds despite Frogwares hitting the milestones on time, prompting multiple letters telling Nacon to pay up.
The letter mentions that Nacon bought up “a competing studio working on another Lovecraftian game,” likely a reference to Cyanide Studio which Nacon acquired in May of 2018, and which produced Call of Cthulhu. After this acquisition, Nacon allegedly demanded Frogwares hand over the source code for The Sinking City. Frogwares declined to do so and claims that they were cut off from funding for four months, presumably in retaliation.
Shortly after The Sinking City was released, Frogwares states they received a letter from the publisher indicating that all previously approved milestones were being canceled, which would have eliminated any monies from the sales of the game. In response, Frogwares filed suit against Nacon for breach of contract in August of 2019. It appears that the discovery process found significant irregularities, such as missing or improperly displayed trademark logos, a large number of domain name purchases related to The Sinking City as well as the Sherlock Holmes series of games (which Frogwares also produces), and a tabletop RPG based off The Sinking City, none of which was properly attributed to Frogwares.
Nacon’s official response to the open letter reads as follows:
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
As of right now, the only way to obtain The Sinking City is directly through Frogwares’ store page or through the Nintendo eStore.
