Today, developer Frogwares finally spoke out about the matter, releasing a lengthy statement saying that the removal was the result of a legal dispute with publisher Nacon, formerly known as Bigben Interactive. The two companies signed a deal in 2017 granting Nacon the right to “sell and commercialize” the game on consoles and PC in exchange for payments based on production milestones—a fairly standard arrangement, from the sound of it—while actual ownership of the game would remain with Frogwares.
But according to the claim, Nacon was consistently late with payments, particularly after the publisher purchased a studio working on another Lovecraftian game—possibly Cyanide, which Nacon acquired a few months ahead of the 2018 release of Call of Cthulhu. After the acquisition, Nacon allegedly demanded that Frogwares turn over the source code to The Sinking City.
“Once again, BBI/Nacon does not own the IP—they are a licensee. They sell the game—not develop and co-create it,” Frogwares said. “After we refused to comply, we stopped receiving financial contributions for over 4 months.”
Following the release of The Sinking City in June 2019, Frogwares said Nacon attempted to cancel previously-approved milestones, meaning that it would not receive any profit on the sale of the game. This was the action that resulted in the lawsuit: “A retroactive cancellation on not delivering a product on time that is already out in the market is not acceptable,” the studio said.
After the suit was filed, Frogwares said it found numerous inconsistencies in income reports that made it impossible to determine whether sales or revenues were being properly calculated. It also discovered that some copyright notices were incorrect, and that the Frogwares logo had been removed from some PlayStation 4 and Xbox One game covers and marketing materials, giving the impression that Nacon and not Frogwares owned the property. There was even a tabletop RPG produced without the studio’s knowledge.
“We tried to contact BigBen/Nacon for 11 months and resolve these issues, but we have not received any satisfactory response from their representatives,” Frogwares said. “So during a lengthy and exhausting legal battle, we finally decided to terminate the contract on April 20th, 2020, because of the numerous above-mentioned issues.”
Frogwares said that Nacon attempted to use emergency laws intended to protect businesses during the COVID-19 pandemic to resist the termination of the contract, although it was ultimately compelled by French courts. Despite that, Frogwares says that it is still owed roughly €1 million in royalties, and that confusion over who actually owns The Sinking City is still causing headaches, and led some storefronts to “preemptively delist” the game while waiting for everything to be sorted out.
“Given these breaches, ongoing hurdles and an unwillingness to cooperate, Frogwares last resort was to request the removal of The Sinking City from any remaining stores to at least halt any further sales going to BBI/Nacon,” it said.
Nacon, the publisher, has not yet commented on the matter but said that it will issue a statement tomorrow. We’ll update when it does.