The developers of The Sinking City accused the publisher Nacon of non-payment of royalties for € 1 million

Ukrainian developers from Frogwares wrote an open letter in which they told about the conflict with the company Nacon (formerly Bigben) and the reasons for the loss of their game The Sinking City from various stores. Inside there is a debt of a million euros, attempts by the publisher to appropriate the rights to the project and litigation.Conclusion of the contract and terms of the transaction

Frogwares signed an agreement with Nacon in 2017, when The Sinking City had been in development for two years;

the publisher financed the development and distribution of the game, while all IP rights remained with the Ukrainian studio;
according to the terms of the deal, the studio was to receive payments for each successfully completed stage of development and in the future a percentage of each copy sold.
The beginning of a conflict and problems during development

Frogwares claims that the publisher regularly delayed payments (on average by 40 days).

At the same time, the developers always did the work on time;at some point, the publisher demanded Frogwares to provide the source code of The Sinking City after acquiring another studio to develop another game inspired by Lovecraft’s work;
when Frogwares refused and considered it a copyright infringement, Nacon delayed the payments due for four months;
the publisher also did not provide sales forecasts.
According to the developers, only the guarantees in the deal with Epic Games Store gave them at least some confidence in the future.Problems after the release and the beginning of the trial

When The Sinking City was released on June 27, 2019, Nacon refused to pay developers the required interest on sales.

The company referred to violations of the terms of the contract, although the developers note that the results of each stage of development were approved by the publisher;In response, Frogwares filed a lawsuit in August of the same year, after which Nacon began making payments.
According to the developers, the sales reports were incomplete and inaccurate;the publisher removed the studio logo from the covers on PS4 and Xbox One, as well as from other marketing materials.
When Nacon entered the stock market, the company indicated that the rights to The Sinking City belong to it;also, without the knowledge of the developers, a tabletop RPG was created for their game and dozens of domain names were bought up.
Termination of the contract and removal of the game from the stores

Frogwares has been trying to contact Nacon for 11 months and resolve the situation, but the publisher has not contacted the developers.;

On April 20 of this year, the Ukrainian studio decided to terminate the contract, but Nacon stated that this was impossible.
It’s all about French legislation aimed at protecting businesses during the COVID-19 pandemic;as a result, Frogwares managed to get the contract terminated, referring to the force majeure clause in the contract.
On July 17, Nacon tried to challenge this in court, but was refused;The publisher continued to mislead the owners of the platforms, convincing them that they had exclusive rights to The Sinking City.
That is why the developers were forced to remove the game from the stores in order to block Nacon access to revenue from the project.Further plans of Frogwares

the studio insists that it intends to recover compensation in the amount of another €4.5 million (in addition to the €1 million announced above in the form of unpaid royalties);

Now The Sinking City is available only in Origin, the Gamesplanet store, on the Nintendo Switch, as well as directly on the studio’s website.
In the future, Frogwares plans to return the project to other stores;at the moment, representatives of Nacon have not commented on the situation in any way.
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