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Wednesday, December 30, 2015

The GT incident

VD, any reference to the GT incident that you are talking about? I tried looking it up, but it is hard to search for, apparently, for someone that isn't already familiar with the story.

It's a matter of public record:
Contracts; pleading; prevention of performance of condition precedent; repudiation and right to terminate; implied duty of good faith and fair dealing. Tortious interference with contractual relations. Alleged breach of agreement granting defendant rights relating to two software video games. Motion to dismiss (CPLR 3211(a)(7)). Standards for pleading breach of contract. The court upheld a breach claim. The court rejected an argument that plaintiff had failed to comply with a condition precedent because defendant had allegedly prevented the performance of the condition. The court dismissed a claim for repudiation of the entire agreement since under it defendant had had an unconditional right to terminate, which it did, and thus could be liable only through that date, there being no provision for acceleration of future payments. The court ruled that a fair reading of the contract indicated that defendant had an implied duty of good faith to assist, or not interfere with, plaintiff’s entering into bundling arrangements with computer manufacturers. A third claim was thus upheld. The court found that plaintiff had set forth only conclusory allegations regarding interference with prospective contractual relations and thus dismissed that claim. Fenris Wolf Ltd. v. GT Interactive Software Corp., Index No. 601206/99, 10/15/99 (Cozier, J.)
We were working on a groundbreaking SF 3D shooter with AI-driven squadplay called Rebel Moon Revolution that was signed to GT Interactive. We'd had a huge success with Rebel Moon Rising thanks to bundling deals with IBM and Intel; GT used to joke that we were the only developer who had ever sent THEM checks for hundreds of thousands of dollars.

(This is why I'm never bothered by people claiming I'm a failure. My most spectacularly stupid moves, the mistakes I would most like to have back, have usually been related to my failure to properly exploit either opportunity or success. We gave GT a percentage of our revenue to handle the tech support; it turned out to be the most expensive tech support in computer game history. Idiotic.)

However, GT lost their crown jewels to Activision and soon came under financial pressure due to their funding practically every type of shooter EXCEPT the one that we pitched them twice: a WWII shooter. No one, they explained, would be interested in THAT. No wonder they went out of business.

In the summer of 1998, they went weirdly silent after we delivered a milestone that should have been routinely approved and paid. I got a phone call from our producer, who was very upset and told me that the milestone was not going to be approved. When I asked what was wrong with it, he said, "nothing". Then he told me it would never be approved, and that they were terminating many development contracts, pretty much everything that wasn't due to ship before the end of the year.

I'd heard rumors that this might be in the works; Sega of Japan had recently shut down Sega of America, and with it our Dreamcast launch title, an SF RPG that we were developing with Julian LeFay of Daggerfall fame, so I wasn't exactly shocked. I asked when we could expect the termination notice, which was due within 30 days of a milestone rejection according to the contract, and was shocked when he said, "yeah, that's the thing, they're not going to terminate."

You see, what GT was doing was trying to get back the money it had already paid out to its developers by refusing to release their claim on the IP unless the developer returned a substantial percentage of the advance it had already earned via milestones. This meant that the developers couldn't take their projects elsewhere; we had good relationships with Microsoft at the time and would almost surely have gone there. Unlike other developers, we resisted their legal pressure, filed a lawsuit, beat them in the initial rounds of court, and ultimately forced a settlement in the place of the simple letter of termination they should have sent us.

The victory came at a serious cost, though. The legal process takes a long time, and by the time GT offered us a settlement worth taking, our entire team was already dispersed throughout the industry in the jobs we'd helped them find. My partner and I were so burned out and disenchanted that we both left the industry for several years. It was a substantial victory, but a Pyrrhic one; we would have been much better off in the long term just signing up with Microsoft and letting them deal with the legal complications such an action would have created.

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35 Comments:

Blogger Student in Blue December 30, 2015 8:40 AM  

While highly interesting, stories such these are also extremely frustrating. It reminds me of all the video game series I deeply loved that got screwed over the years and it ticks me off.

Blogger exfarmkid December 30, 2015 9:07 AM  

"Good judgment comes from experience.
Experience comes from bad judgment."

I got a hunch every non-SJW reader on this blog has "bad judgment" stories like this, all of them due to lack of experience.

"What the ***k was I thinking? Stories to learn by" could be the title of a decent book.

Blogger Student in Blue December 30, 2015 9:16 AM  

"Good judgment comes from experience.
Experience comes from bad judgment."


Hence why listening to your elders is a good idea.

Blogger Aeoli Pera December 30, 2015 9:29 AM  

My elders told me to go to college. Fuck 'em.

Blogger Aeoli Pera December 30, 2015 9:34 AM  

That said, if you ever run across an old person whose head isn't firmly planted in their ass, set aside time every week to frack the wisdom out of them like it's black gold.

OpenID denektenorsk December 30, 2015 9:35 AM  

Ah yes, I remember those times. Just before EVERTYHING became WW2. And then it was Vampires. And then Zombies. Now it's the anti-hero... sometimes with zombies. Will those things ever die?

Blogger Student in Blue December 30, 2015 9:37 AM  

My elders told me to go to college. Fuck 'em.

Elders aren't perfectly wise in everything, mind you. As it wasn't even a judgement call whether they went to college, when they went to college, they don't have experience and can't give good judgement at that time.

OpenID denektenorsk December 30, 2015 9:37 AM  

That said, if you ever run across an old person whose head isn't firmly planted in their ass, set aside time every week to frack the wisdom out of them like it's black gold.

Please don't try to frack me. Since my head isn't in my own ass I'd like to keep it in its originally intended tension setting for as long as possible.

Blogger Student in Blue December 30, 2015 9:39 AM  

@denektenorsk
Will those things ever die?

I remember reading somewhere that what the populace clings to for fictional tropes reveals a lot, so in constantly going back to zombies the populace in general believes that society has become diseased and ill and harbors a desire to get to killing and surviving.

Blogger epobirs December 30, 2015 9:53 AM  

@4
Said elder probably thought it didn't need to be stated that studying a field that you would be well paid to practice was a requirement.

Blogger Were-Puppy December 30, 2015 9:57 AM  

"I'd heard rumors that this might be in the works; Sega of Japan had recently shut down Sega of America, and with it our Dreamcast launch title, an SF RPG that we were developing with Julian LeFay of Daggerfall fame, so I wasn't exactly shocked. "

A DC Launch title? Ah, what might have been...

Blogger Were-Puppy December 30, 2015 9:59 AM  

@5 Aeoli Pera

That said, if you ever run across an old person whose head isn't firmly planted in their ass, set aside time every week to frack the wisdom out of them like it's black gold.
---

That is a very good idea. I sometimes will talk with old timers for that very reason.

Blogger Were-Puppy December 30, 2015 10:00 AM  

@6 denektenorsk

Ah yes, I remember those times. Just before EVERTYHING became WW2. And then it was Vampires. And then Zombies. Now it's the anti-hero... sometimes with zombies. Will those things ever die?
---

We were old timers to some of those young pups wasting countless game hours with zombies. We used to walk 10 miles through snowy wastelands barefoot dealing with endless vampires. *smacks toothless gums*

Blogger Were-Puppy December 30, 2015 10:12 AM  

@9 Student in Blue
@denektenorsk
Will those things ever die?

I remember reading somewhere that what the populace clings to for fictional tropes reveals a lot, so in constantly going back to zombies the populace in general believes that society has become diseased and ill and harbors a desire to get to killing and surviving.
---

That's an interesting theory.

I'm more of the mind it's the corps that are holding on to a milk cow until it's last tit falls off.

There is a song from the Galactic Cowboys kind of explains this from a musical perspective in how they push out clones of each other in the music industry:

Tomorrow - Galactic Cowboys

I tried to call you but you were gone
Way too busy stickin' the labels on
Deciding who will swim in the talent pool- and what is cool

Cultivating more popularity
Overly concerned with what not to be
Trendy little fashions that please the eye- you'll televise

Whatcha gonna do tomorrow?
Whatcha gonna do when it's over?
I just don't fit into the clique
You're so hip you make me sick
Whatcha gonna do tomorrow?

Pay no attention to quality
Churning out the pap like a factory
The only standard is how ya feel- not what is real

You never heard a word that I said
Totally convinced that the sound was dead
Creating categories that fit the times- condition minds

You move 'em in and move 'em out like they were cattle
Burn a brand into their hide
With all apologies to L. A. And Seattle
Cloning is artistic suicide

Blogger dc.sunsets December 30, 2015 10:33 AM  

Horror is reportedly popular in bear markets & in constant dollars this is year 15 of the Great Bear Market.

Zombies have some time left, as do anti-heroes.

Blogger jamsco December 30, 2015 10:43 AM  

Vox, I find these biographical story posts fascinating. I think you should write more.

Anonymous Napoleon 12pdr December 30, 2015 10:45 AM  

@15 dc:

Given the lead time, this means that a software developer needs to be working on a classic heroic game at this point, to market in 2017.

Blogger VD December 30, 2015 10:46 AM  

Vox, I find these biographical story posts fascinating. I think you should write more.

The stories often aren't only mine to tell. In this case, the public info is already out there and merits context.

Blogger luagha December 30, 2015 10:47 AM  

Also, the harsher the times, the more garish, or the more fantasy-like, the fantasy.

Thus the success of the well-done Lord of the Rings and the new endless Superhero films. The worse the times, the more 'normal' heroes aren't enough and you can go outside the normal to give the viewer a sense of empowerment and larger-than-life.

Anonymous The other robot December 30, 2015 10:57 AM  

We gave GT a percentage of our revenue to handle the tech support; it turned out to be the most expensive tech support in computer game history. Idiotic.

Heh. You should have outsourced it to India!

Anonymous Leonidas December 30, 2015 11:06 AM  

I'd heard rumors that this might be in the works; Sega of Japan had recently shut down Sega of America, and with it our Dreamcast launch title, an SF RPG that we were developing with Julian LeFay of Daggerfall fame, so I wasn't exactly shocked.

Sadly, this is just how the industry works sometimes. Back in early 2000, a friend of mine who was better at selling himself than at anything else somehow managed to talk his way into getting a dev kit for the NeoGeo Pocket Color handheld system. Of course, he couldn't code to save his life, so he called me up. We had six weeks to put together a demo before their main trade show, and that happened to coincide with finals over my last semester of college. Which meant that I really had about half that time to actually do something.

Thankfully, my friend was a solid artist, too, and me... well, I'm good at what I do. So we had a demo. I thought it was total crap, because I'd never, ever written code for a console system before and it's a completely different beast than a PC, and had to learn all of that in six weeks with minimal documentation and no course on console game development.

But the people who had given him the kit - who turned out to be the marketing division for NeoGeo itself - were really excited by what we'd done in such a short time, and they were ready to get us funded for our own game - a relatively simple Mortal Kombat/Street Fighter type fighting game. They flew my friend out to their big trade show, wined and dined him, and pumped him up with excitement...

Only for NeoGeo to announce the next day that they were killing the system and cutting all funds for new development. It sucked, and we were obviously bummed out about it. But that's life, and sometimes things just go down that way. We weren't anywhere close to connected enough to have heard rumors about it beforehand.

On the other hand, I wasn't totally surprised. Despite years of effort and millions of dollars, they'd never managed to take more than 2% of the market away from Nintendo, which had a total lock on handheld gaming at that point. At some point they were always bound to shut off the spigot. In hindsight, the game probably wouldn't have been a financial success anyway because the number of systems in the wild was just too small.

That's why so many developers these days refuse to take exclusive deals for just one system anymore. They'll port it anywhere they can. Because even with the big dogs, you just can't count on the console still being around by the time development is done.

Anonymous The other robot December 30, 2015 11:07 AM  

OT: How to get rid of refugees

Blogger pyrrhus December 30, 2015 11:31 AM  

I have explained many times to clients that filing a lawsuit may sound like fun, but it is not likely to accomplish your purpose unless certain conditions are present, one of which is that time works in your favor. They sometimes listen....

Blogger camperbot December 30, 2015 11:44 AM  

@pyrrus IIRC VD has explained before elsewhere that all he wanted was a letter. GT were unwilling so in the end they had to cough up a couple of hundred thousand dollars instead. It may have hurt him and his team at the time but it hurt them a lot more in the long run.

Anonymous That Would Be Telling December 30, 2015 12:13 PM  

Going further, there are few things more disastrous to a small technology firm than an impairment of their IP. I've never been in a company that succeeded going forward once that happened, and once GT held Fenris Wolf's IP hostage for money I assume it couldn't return it was screwed.

Throw away your current work and restart? Any big success would suffer a lawsuit, which would have a chilling effect on getting a publisher in the first place. Go to the Microsoft of the late '90s? In retrospect, perhaps the best choice, but the number of people who got screwed doing business at that level with Microsoft is legion.

Or sue in the hopes of GT deciding it would be cheaper to settle, all they had to do was to formally terminate the contract (the letter camperbot @24 refers to)? No way to know in advance that they would be bloody minded enough to draw it out 2 years and pay way more than the money they were trying to extort from Fenris Wolf, not even counting the legal costs.

They had no good choices once GT became fatally desperate.

Blogger Student in Blue December 30, 2015 12:22 PM  

@That Would Be Telling
Going further, there are few things more disastrous to a small technology firm than an impairment of their IP.

I can't help but think it's a little bit different in video games. It's not pleasant to be sure, and it's certainly a hindrance, but video games can at least change out art assets and maintain a very large portion of what they had.

Of course, jumping from one console to another is a lot trickier if I'm guessing right, as that requires quite a bit of code reworking if you want it to run well.

It's a crappy situation to get your IP taken away, but I remember hearing of a number of companies stick the landing because the IP is often tied up with art and story, not with the underlying code or game systems.

Anonymous That Would Be Telling December 30, 2015 12:40 PM  

@26 Student in Blue:

Ah, right, I wasn't thinking about art IP, but in this case it was impairment of their game engine plus I assume at least some of the AI, which especially back then was not easily changed.

Jumping to another console can be a matter of timing, and for ones that aren't out yet, being able to get in early. I skimmed the Wikipedia Dreamcast entry, and what stood out was people not trusting Sega after some previous console disasters, related, a failure to come to a deal with EA, and Sony, new to the field and evidently not having previously screwed its partners over hyping their upcoming Playstation 2, which I'm under the impression was a smash success. (And of course Sony is Sony, a very big company, and even bigger technology leader, by then.)

OpenID Jack Amok December 30, 2015 1:35 PM  

My elders told me to go to college. Fuck 'em.

Some people are elders, and some people are just old. Telling one from the other is a pretty good skill for a youth to have.

the number of people who got screwed doing business at that level with Microsoft is legion.

And here I have a story that isn't entirely my own to tell, other than to say almost every big publisher screwed a legion of developers at one point or another. Whether Microsoft was slightly better or slightly worse than the average, I don't know.

But reading between the lines of Vox's story, one thing to note is the longer your development cycle, the greater the chance your publisher may change their minds (or be forced by circumstances). Be quick, it gives fate less opportunity to be fickle.

Anonymous That Would Be Telling December 30, 2015 2:06 PM  

@28 Jack Amok:

the number of people who got screwed doing business at that level with Microsoft is legion.

And here I have a story that isn't entirely my own to tell, other than to say almost every big publisher screwed a legion of developers at one point or another. Whether Microsoft was slightly better or slightly worse than the average, I don't know.


That's why I said the number for Microsoft was legion. That it seemed to be corporate policy became of the things that contributed to their subsequent difficulties, because they suffered so much reputational damage. And I note GT's severe screwing of Fenris Wolf, and no doubt other studios, didn't actually save them, they were bought for a song in 1999 and the brand was dumped in 2003.

Blogger RobertT December 30, 2015 2:24 PM  

The wheels of justice grind slow, but grind fine.

Sun Tzu may be right, but my experience is, if you are a genuine criminal the safest place to be is the enmeshed in legal system. And after all is said & done, it doesn't grind as finely as justice would expect.

Blogger RobertT December 30, 2015 2:28 PM  

Smart people use the legal system to delay and/or to knock the rough edges off agreements you've grown weary of. If you're looking for justice, you won't find it there. Structure yourself properly and you can basically run wild.

Anonymous Rolf December 30, 2015 3:19 PM  

These days MSFT is more run by lawyers and HR than by developers and sound technology, or even the idea of doing what's best long term for their customers as a development strategy. I have an all Windows house for computers. I worked at MSFT in the 1990. I've generally supported them in the past. But they are now making me seriously consider building a Linux machine for the next upgrade; Win 10 policies and all the rest are going in the direction of golden chains that assume users are all idiots and will make real freedom impossible for the users.

OpenID Jack Amok December 30, 2015 3:29 PM  

That it seemed to be corporate policy became of the things that contributed to their subsequent difficulties, because they suffered so much reputational damage.

Yep, and one of the things that enables that is changing personnel who don't feel (and aren't usually made to feel) responsibility for any sort of continuity. That was somebody else's deal, I don't need to honor it. And so the company takes the reputation hit.

Speaking of reputation hits, our small company was a few years ago able to get paid most of what we were owed on a broken contract by convincing the publisher their reputation would be sufficiently trashed if we went public with the dispute. It took a few months and we had to take a slight haircut on what was owed, but it was a better deal for us than a lawsuit would have been. We were fortunate in that they a) had money, b) expected to stay in business and c) were reasonable, so an agreement was worth it to them. But it sure wasn't pleasant.

Blogger Student in Blue December 30, 2015 3:58 PM  

But they are now making me seriously consider building a Linux machine for the next upgrade

If OpenGL keeps going along or SteamOS kicks off or some other way that makes Linux just as good for gaming as Windows, I'm going to do that exact thing.

That's the only thing keeping Windows alive right now, gaming and offices - and to be honest gaming is the bigger chunk between the two.

Blogger FP December 31, 2015 12:37 AM  

I think I would favor office uses over gaming but either way, MS has been shooting themselves in the foot the past 3 years OS wise. Windows 8 and its windows apps/store scared Steam and now Steam/Linux scare Windows such that they jump back in with DX 12.

It does amaze me how many I see in the tech community, custom system builders, hardcore gamers most of them who support windows 10 uninstalling programs automatically on some updates. At this stage, if I upgrade to 10, it will only be on my dedicated gaming PC.

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