Publisher Nacon Cracked and Pirated Our Game: The Sinking City
frogwares.com
frogwares.com
The case when this is breaching original contracts is the well the separate issue. Often times the publisher and developer have different views of the world, - relationships in this industry have always been tense.
I've heard that one of the appealing features of Steam for developers is how easy it is to upload new versions and generally distribute your game.
I also can reinstall hundreds of games from Steam without remembering who developed it, who paid for the development, or who published it to Steam. I just tell the Steam client to install it based on the name of the game. That's a great usability and convenience feature.
However! Publishers don't do that. Publishers' value proposition is funding the development and doing the marketing for you, so that you can concentrate on making the game. If the game tanks, they eat up the losses (i.e. it's an investment, not a loan). The retail is a separate issue and, while it's handled by the publishers, is still likely to be handled via Steam or other platforms.
You also have to check if your customer is any other of the countries / states that collect VAT (India, Indonesia, many US states and oh so many random countries) and make a proper declaration in each country. It's almost impossible to do it right if you don't go with a partner to handle it all.
There is an alternative for online services, etc called VAT MOSS[0], mainly meant for smaller sellers which allow you to keep paying VAT in your own country without registering in all of them but you still need to apply different VAT rates depending on your customer's country. Also you need to keep records of these transactions.
Steam (and other services... well actually even Steam uses an external service for this) handle that stuff for you and you only deal with Steam.
[0] https://europa.eu/youreurope/business/taxation/vat/vat-digit...
Marketing seems to be the biggest draw for using a publisher these days. That and getting easy access to partner management with sony and microsoft. My understanding is that some publishers are even quite good at social media now, helping indies get exposure on twitch and youtube.
They’ll charge a hefty fee compared to doing it yourself, but still far below the Steam cut.
Although publishing on steam obviously has other advantages.
What if you simply do not do this? Are they going to arrest you? (Presuming you are VAT registered outside of the EU or whatever)
This is actually something that the Factorio developers (mentioned in the comment you're replying to) have had a lot of issues with. See "The Grey Market" (https://www.factorio.com/blog/post/fff-171) or this article: https://www.pcgamer.com/factorio-devs-take-g2a-up-on-its-cha...
Marketing
Localization
Covering development costs
Physical distribution
It is definitely possible to do marketing and localization alone as a company, but it will divert studio's focus from game development, which could do more harm than good since game development is insanely hard. Physical distribution is almost impossible to do properly for a small company. Of course there are game investors that invest into specific games and it could be better fit than publishers, but you can do both.
need to spent hours trying to install all that stuff
That is pretty much not a case.
I do think that the steam's fee of 30% feels strange, but all the infrastructure they provide is pretty sweet. How do you update the zip file you downloaded? Do you trust every developer to keep their download servers running forever so you can always download it later?
Well, this sounds like spyware (unless it is opt-in).
This is comparable to what every developer on every console has paid for over three decades in publishing, and still leagues better than what they were making from boxed retail sales.
That is why EA owns so many game studios one big flop and suddenly you owe EA a couple of million.
tl;dr Up-front advance was important for cash flow and risk management. At the end of the day they ended up with less profit but think it was the right decision anyways.
http://weatherfactory.biz/state-of-the-factory-year-1/
Note also that there is a difference between a publisher (Humble) and a distributor (Steam), which is covered in that post.
That's why Kickstarter and Steam Early Access are such a big deal, they allowed new financing models and independent game-dev studios to emanzipate themselves from publishers.
In some cases a publisher makes sense, in some it does not.
Yeah, double clicking on a game and having it automatically downloaded and executed... hours of work and hundreds of viruses! You have obviously never used steam and origin.
1. Download Steam client
2. Click to install Steam client
3. Steam client starts to download even more crap itself
4. Steam client actually starts installing
5. Sign In/Register
Then when you want to install or even play a game...
1. Launch Steam
2. [UPDATING STEAM, PLEASE WAIT]... Jesus Christ...
3. Sign In/Register
4. Click to install game
5. Launch game
6. [CHECKING FOR UPDATES, PLEASE WAIT]...
7. Finally play game
And if your internet connection goes offline? Enjoy, you're fucked.
Yeah, fuck Steam and all similar bloatware.
The Sinking City is Being Delisted. Here’s Why
https://frogwares.com/the-sinking-city-is-being-delisted-her...
Without wishing to take sides, here's what seems to be at the root of the dispute, from Frogware's POV:
On June 27, 2019, The Sinking City was released on Xbox One, PS4, and Epic Games Store. That was a great day for us. And once the game was released, we received a letter from Bigben/Nacon that the milestones that were previously approved are being canceled, meaning that we would not receive any profit from the sales of the game. A retroactive cancellation on not delivering a product on time that is already out in the market is not acceptable. That was when our legal battle began.
We filed a lawsuit against Bigben/Nacon on August 2019 and, incidentally, only then we started to receive income reports, though incomplete and undocumented. So it was not possible for us to see if the revenue was correctly calculated or even how many units we sold. At some point we received a statement claiming that one of the console manufacturers hasn’t paid royalties for more than 5 months, while actually the same console manufacturer paid our royalties from other games without any delay in the same period of time.
They seem to be under a court order to at least fulfill their contract obligations until the dispute is resolved.
> Steam is one of the listed platforms of commercialization in the contract between Frogwares and Nacon. But since the release of the game, Nacon’s unlawful actions have forced Frogwares to defend its property and react in front of the French Justice for lack of payments, attempts to steal our IPs, etc which we made a public letter about back in August 2020.
Here's the previous statement from Nacon:
https://store.steampowered.com/news/app/750130/view/30584784...
I can't find any of the details about Nacon's unlawful actions, and it seems Frogware is being intentionally vague. Doing some digging, it seems like this is almost a complete retread of a legal battle they had before:
https://twinfinite.net/2019/09/frogwares-games-delisted-alle...
It seems like they may have a history of playing a copyright game with publishers - take their money to develop a game, then use legal trickery to take back the property outright.
In this case Nacon may have felt they had a "mechanic's lien" on the code and felt justified stealing it back outright (probably a bad choice in the long run). But regardless, I don't get the sense that Frogwares is completely being on the up and up about the relationship with their exes.
Update: Frogwares has a much more detailed list of grievances here: https://frogwares.com/the-sinking-city-is-being-delisted-her... Some seem petty and some seem serious. But it still leaves questions. How much did Nacon already pay Frogwares? Does Frogwares plan on paying it back?
> The agreement is, therefore, terminated without further formality. Moreover, on July 17, 2020, Nacon attempted to oppose the termination in court, but the judge rejected the demand, and the contract is now terminated in the eyes of the law.
Maybe French law is much weirder than ours, but this phrasing would be highly suspect in the US. You would get a really affirmative ruling that you are still bound by contract or not.
It's very possible that the producers, lawyers and business development people involved in the original deal had all moved on. NOLF is famously not getting a remaster because nobody can figure out who owns it!
Maybe Frogwares is a bad actor, I don't know. But game publishers are notorious for trying to get away with all sorts of shit with studios that cannot afford to fight back, so there's another possibility: Frogwares is prepared to litigate to defend what is legitimately theirs.
I don't doubt for a second that the publishers are crappy actors. But on the same token, you wouldn't expect them to do something so brazenly awful unless they had a legal leg to stand on.
Yet another way the games industry is just "movie industry 2.0". The web of production and distribution deals in the movie biz is notoriously hairy, prone to end up in situations where IP ownership is contested. Which is a shame, really.
They are not.
They’ve written about it before: https://frogwares.com/the-sinking-city-is-being-delisted-her...
In short,
- They have withheld payments owed Frogwares.
- They have been behind on payments made by on average 40 days.
- They have incorrectly claimed to own the IP to third parties, including in their IPO.
I can't imagine it will be so simple for Frogwares to rip up their contract and walk away with the money they were paid already. But I imagine their publisher openly ripping off their game will make upcoming settlements really easy for them.
> to deliver the sources
this seems weird, since one party is telling the world from their blog the source transfer was never part of the agreement
I didn't read the full decision linked by @ernesth, but this part says that they have to deliver two "masters", one drm free and one for Steam.
Sur la livraison des formats manquants :
— ordonner à Frogwares Ireland de lui livrer les deux masters du jeu 'The Sinking city’ sur format PC DRM Free et Steam sous astreinte de 50.000 euros par jour de retard à compter du 5 ème jour suivant la notification par e-mail de la décision à intervenir
I think the meaning of master in this case is Gold Master : https://en.wikipedia.org/wiki/Software_release_life_cycle#RT...
French law is not that strange :). But the decision was appealed and it seems Nacon won in appeal (in october 2020), which allowed them to pursue the contract and to publish the game another time.
The decision: https://webcache.googleusercontent.com/search?q=cache:DwqXp6...
In 2019:
— Publisher paid for game development, though usually not on time. Per contract, IP remained with the game dev, and there was no obligation to hand over the source.
— Publisher hired another studio to work on a similar game, and started demanding source code from game dev.
— Game dev delivered the game (not the source). (Not clear whether on time or not.)
— Publisher released the game, and immediately withheld profits from sales (with some mechanism referred to as retroactive milestone cancellation).
— Publisher was also found to remove game dev’s logo, buying domain names reflecting game dev’s brand, mislead the public as to who had the rights to the game, and do other shady things.
— Game dev sued, with unknown outcome.
In 2020:
— Attempt to pirate the game by the publisher was discovered (February). (Note: this is alleged to have happened long before publisher won on appeal, so it’s not as if the publisher decided to pirate the game after the court determined they are owed the source.)
— Game dev terminated the now-breached contract and notified the publisher. Publisher claimed French COVID regulations precluding contract termination (?!).
— Publisher sued and lost (July).
— Publisher appealed and won (October). (This happened after the publication of the post I referenced.)
This obviously presents game dev’s perspective only. It seems exhaustive enough though, and so far I’m inclined to think they aren’t distorting facts and may have been taken advantage of by a larger business (the publisher).
Violating a court order is bad, and if game dev was ordered to hand over the source they should probably have complied. That aside, it’s unclear whether the courts ultimately sided with the good guy here. Sadly, if game dev’s the victim here, appealing cross-border may be infeasible for them.
[0] https://frogwares.com/the-sinking-city-is-being-delisted-her...
- publisher not asking for the source code, they want GM copies
- publisher didn’t demand source code according to contract ( they state publisher asked for code, but there is no indication they demanded )
- they didn’t deliver the game, at least drm free and for steam
- publisher usually has non exclusive usage right to IP
But most important, they contacted steam etc and delisted game still appeal process was going, citing IP reasons.
Also they are even defensing that delaying steam release didnt cause any harm to the publisher.
They are acting in bad faith clearly.
> they didn’t deliver the game
I don’t think either of us knows what exactly the delivery entailed (if you do, you could share a source), but as far as I understand the game was delivered as it was sold by the publisher (who kept and/or didn’t completely disclose profits—against the terms, it appears) and played by the users.
> they state publisher asked for code, but there is no indication they demanded
According to their post, publisher hired another studio to work on a similar game, and apparently wanted to have the code for that purpose. “Ask for” is different from “demand”, I agree, though it does sound like they were pressured.
That aside, are you basically saying the game dev is lying and their contract with the publisher was different from what they claim in their posts? I guess we can’t say for sure, absent evidence, but I don‘t see why they’d lie here.
On the contrary, it sounds like the publisher had already given the develop several millions of dollars to develop the game. You can't just declare a contract void, keep the money, and tank the deal.
https://webcache.googleusercontent.com/search?q=cache:DwqXp6...
Frogwares was under a court order to fulfill their obligation.
IANAL, but it's worth pointing out that none of the court orders precluded a lawsuit for Frogwares to collect their fair share. But them violating their obligations in the mean time is probably bad faith and will land them in hot water.
I’m not a lawyer, but I’m pretty sure about this: if you partially fulfil and also partially breach a contract, the end result is that you have breached it.
> Attempt to pirate the game by the publisher was discovered (February). (Note: this is alleged to have happened long before publisher won on appeal, so it’s not as if the publisher decided to pirate the game after the court determined they are owed the source.)
Actually, there are two alleged instances of piracy.
First, in Feb 2020, their game was slated to be listed on a distribution platform that was not agreed upon.
(In August 2020, they removed their game from Steam.)
Second, in Feb 2021 (just last week!), the deluxe version of their game was listed on Steam with identifying watermarks, copyright, digital signing, and more removed _from the software_.
My [non-lawyer’s] impression based on the older post is that, if true, the publisher acted maliciously enough in early 2020, and the fact that the court decided the appeal in publisher’s favour in the first place weirds me out a bit. It looks like emergency COVID regulations against contract termination came into play? They were designed to protect struggling small businesses, but in this case ended up favoring publisher’s booming enterprise (game sales appear to have done very, very well during the pandemic).
Honestly, the surprising part is that Frogwares won in July. To terminate the contract, they asked Nacon to hand in justification for their costs of distribution and used Nacon's failure to deliver them in a month as justification. As that's not explicitely part of the contract - Frogwares can ask to audit Nacon and Nacon has to allow them to do so in a month, they can't ask to be delivered arbitrary documents - it was obvious that the termination would be deemed illegal.
I don't understand why Frogwares keep speaking of the emergency COVID regulations. They would have allowed the publisher to be late in its contractual obligations but Nacon wasn't. The appeal court explicitely stated they didn't apply as both Nacon and Frogwares kept their activities going as usual.
But to give you an idea of how badly Frogwares managed this lawsuit, the court went out its way to explicitely point they were throwing out parts of Frogwares'"mise en demeure" - the letter explicitely asking Nacon to submit documents - becuase it was to poorly and vaguely worded.
To be harsh, Frogwares are going at it like amateurs. At the end of the day, the heart of the issue is a disagreement regarding the amount they are owned. I don't understand why they didn't just pursue that angle and I don't think the amount of press they are giving the whole thing is going to help them much.
If you read the appeal court judgement summary, you will see that they are actually heavily distorting facts.
You are notably missing these parts:
- the publisher asked them for GM copies in order to publish, don't seem to contest that the IP is owned by Frogwares and the part about the other studio seems to be mostly paranoid non sense;
- Frogwares is unhappy about the amount of royalties they are paid, thinks the costs of distribution are inflated by Nacon but didn't properly trigger the contract audit close;
- Frogwares is extremely unhappy about the Epic store launch and seems to think they should have got more money despite actually failing to deliver on the contractualy agreed date;
- Frogwares went over their publisher to have the game delisted from distribution plateformes in a total breach of contract;
- Frogwares terminated the contract for a spurious motif (failure to justify costs of distribution in a month) which was never part of said contracts
- publisher never claimed that French COVID regulations precluded the contract termination, only that the contract termination was illegal which it was shown to be.
The whole thing is far from one sided.
while https://news.ycombinator.com/item?id=26314325 "Order Frogwares Ireland to deliver the two masters of the game 'The Sinking city' on PC DRM Free and Steam format under penalty of 50,000 euros per day of delay from the 5th day following notification by e-mail of the decision to intervene,"
someone is lying to me here
Edit:
The relevant part in french:
Sur la livraison des formats manquants :
— ordonner à Frogwares Ireland de lui livrer les deux masters du jeu 'The Sinking city’ sur format PC DRM Free et Steam sous astreinte de 50.000 euros par jour de retard à compter du 5 ème jour suivant la notification par e-mail de la décision à intervenir
OK. Then why is your licensee going to such great lengths to publish to a platform you contractually agreed to support?
Something smells here.
I don’t know which parts are true or false, but that’s right in the post, and makes complete sense.
The 50,000 euros per day of delay is what Nacon was asking for when they lost in July 2020. Then, Frogwares lost the October 2020 appeal. The French appeal court decided that the contract dismissal was actually unlawful. Therefore the contract stands and Nacon has the right to distribute the game. However, mandating the delivery of the two masters falls out of the court jurisdiction. This will be judged separatly during the year and the penalities don't apply until then.
In our email exchange, BBI/Nacon essentially wrote that the contract cannot be terminated because of the emergency laws in France, aimed to protect businesses during the COVID-19 pandemic, and at the same time BBI/Nacon refused to fulfill their obligations toward us (payment, documented reports, etc…).
That should cover the original decision of the court. The following seems to hint on the reasoning for the appeal:
– The “Emergency Laws explanation” actually triggers the Force Majeure article of our own contract, entitling us to terminate the agreement in case the parties could not minimize the effects of an Event of Force Majeure on this agreement for a period of 60 days.
Source:
https://frogwares.com/the-sinking-city-is-being-delisted-her...
The appeal court threw away the Force Majeur argument because both actors demonstrably kept b'their activity going as usual and it would have been an argument in favor of Nacon anyway. Force Majeur would have justified them not fulfilling their part as a distributor but they demonstrably did.
The court stated that the termination of the contract wasn't legal because Frogwares had no basis to terminate it. Frogwares alleges that Nacon didn't pay them all they were due. Nacon disagrees and states that they correctly paid royalties minus the costs of distribution per the contract. Frogwares did ask to see proofs of these costs and gave Bacon a month to produce them. They then used Nacon's failure to do so as reason to terminate. However, as stated by the court, that was never what was planned in the contract. While Frogwares has a right to audit Nacon (which they didn't properly use), Nacon is under no obligation to send them arbitrary documents.
Note that it remains entirely possible that Nacon is actually underpaying Frogwares. It's just they went at it in an utterly stupid way.
> This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish.
First off, assuming consent and saying it's "to improve your experience." Maybe they're not doing any targeting... nope, wait, they're loading tracking pixels. And their privacy policy says they use cookies to "...help customize our marketing offerings."
Okay, now how about opting out? Click "Read More" which takes you to... their privacy policy. Some sites at least bury information about how to disable browser cookies entirely in their privacy policy. Here even that is nowhere to be found; no mention of how you could prevent their cookies from being set in your browser at all. (Setting aside the fact that disabling cookies globally in your browser is so obviously not a sane way to avoid tracking on a single site, so even that would be woefully insufficient.)
I can only assume folks in the EU are seeing something that actually asks for consent, because this would be so far from compliance over there it's not even funny. Hoping the US gets real online privacy laws soon.
> You can opt-out if you wish.
No, practically speaking, you cannot.
Nope, same message.
The ability to opt out does not suffice to satisfy the GDPR, even if I could find how to do it.
I do judge. It makes me a bit less receptive to Frogwares' message, that they do this on their company blog
One example: PayPal has a huge banner (often blocking the "pay now" button) asking for permission to use my data for targeted ads, and there's no way to dismiss it other than agreeing to it. So I leave it there forever, and every time I use PayPal I have a little bit more of a negative impression of it.
It's also good to know about them when I'm sharing links with friends - I'll be very hesitant to share one with someone who I know is using a mobile browser, because they definitely won't have the tools to avoid tracking like this.
I'd much rather know about tracking this way (the list of 20 blocked scripts) than they other (they already ran, but at least the site popped up a banner)
This is totally not ok. There's should always be a way to opt out, it's not allowed to just block the site in case people don't want to agree. This has been reaffirmed in court several times. But nothing seems to be done to enforce this.
https://corporate.nacongaming.com/en/press/the-sinking-city-...
I'm not sure if the court decision gives them the right to do what they did (talking about Nacon).
https://corporate.nacongaming.com/wp-content/uploads/2021/01...
This is not someone in China cracking and rebranding things
This all seems very amateurish.
I understand the huge frustrations they must be feeling, and they have legitimate complaints. But trying to rally public opinion against a publisher over a suit they lost is not going to make it easy for them to find publishers in the future.
That said, to me it seems so far that it’s one of those “another country, not my problem” cases. Publisher’s in France, developer’s in UK (or Ukraine?)—even if game developer has the money, best of luck suing cross-border, especially in current times.
Case found in favour of frogware.
Nacon appealed and won the appeal.
frogware is appealing which we're waiting to hear the outcome of.
The judgment, in october 2020, said that frogwares had illicitly tried to end their contract with Nacon. They were condemned to pursue the contract. Hence Nacon has published the game as it was the object of the contract.
Nacon is the company which funded the production of the game. So it's not as though some band of pirates attacked a game development studio. I'm betting they have contractual disagreements regarding how to distribution is supposed to occur, who was supposed to make money off of what etc. - for which reason it seems prudent to listen to both sides.
I'm not sure how French courts would differ, but in my jurisdiction, if a company that was failing to get what it wanted from the court just went and stole it, mid-litigation, there would be a very unpleasant discussion with the judge about what was going to happen next.
Some publishers treat their partner studios like garbage, and it seems more and more studios treat their developers like garbage.
Given on premise, "everyone" thinks their boss is a dope and they could do a better job.
If this were true, then companies built by disgruntled employees leaving their bosses to do said "better job" should be able to outcompete their former employers. Market pressure should push other competitors to adopt similar "better job" practices, and the "dope manager" problem should evaporate away.
But it hasn't. We'll even hear stories about companies that were started with this intention (e.g. Valve), only to later hear other stories about how the bosses are dopes.
I consider one of two possibilities: either there is no such thing as market competition, or the original "everyone" is not as smart as they think they are, and can't actually do a better job.
It could be that success turns you into a dope, but that doesn't change anything. The lack of ability to perpetually do a "better job" pushes us into the "no real market competition" scenario.
I'm actually on the fence as to which possibility I believe is the case. I suspect both are largely true, but which one is dominant is not clear.
As another example of "no real market competition" problem, consider that even small towns have multiple pizzarias, all of which are essentially identical, and equally shitty. They order their ingredients from the same vendors. They either order their equipment from the same vendors, or get it used from the previous pizzeria that went under because it's in a terrible location/ran by a dope, who themselves ordered everything from the same vendors. This "shitty pizzeria" model of markets states that store-front location and customer price biases are much stronger elements of success than product quality, as no pizzeria could afford the marginal cost of improving their product to attempt to capture a greater proportion of customers.
I think a lot of software gets made under the "shitty pizzeria" model. Most software consulting seems to be more about where the consultant is located than what the consultant can do. And in particular, I think a lot of the indie games market fits this market, made famous by memes showing rows upon rows of nearly identical icons in game app store listings.