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Cheyenne Mountain Entertainment on the verge of collapse

Friday - March 26, 2010
Category: PRODUCTS | Tags: ,

Stargate Resistance 06Cheyenne Mountain Entertainment is out of money, out of employees, and nearly out of time.

The studio behind the new video game Stargate: Resistance and the long-anticipated MMO Stargate Worlds is currently undergoing evaluation by a court-appointed receiver, and has effectively ceased operations. Because the leadership of the company is currently in dispute (story), the receiver is empowered by the court to take over management in the interim.

The receiver, Edward Burr, has released his initial findings regarding the current state of the company in a release directed at shareholders, posted on the CME and Firesky Web sites and sent by e-mail to all known shareholders.

According to the release CME currently has no employees and less than $10,000 in the bank. It owes at least $2 million to creditors, unpaid payroll of about $1.1 million dating to March 2009, and federal and state payroll taxes of $3 million. The company has also been named in five legal complaints with a potential liability that the receiver estimates at approximately $10.1 million.

The company cannot pay the rent on its space in Phoenix, Arizona, and the landlord has indicated that he will “lock the doors” at midnight on March 31. To make matters worse, there is also a question about whether CME was the one to sign the original lease at all.

Needless to say, with no employees in an office space about to be closed down, work on Stargate Worlds has come to a halt. “With regard to actual operations, game development has ceased,” according to the report. “Not to be redundant, but there are no employees.”

Stargate Resistance 03Stargate: Resistance

Things look brighter for the game that has been released, however. In partnering with Phoenix-based Fresh Start Studios, Cheyenne Mountain Games (an operational subsidiary of CME) has effectively sold off Stargate: Resistance and held on to continuing royalty rights for having developed the game. FSS is run by a number of CME shareholders concerned with keeping the online game up and running. The company is now paying for the maintenance and development of the game, and is responsible for making the licensing payments to MGM.

“As represented to the Receiver, their sole intent was to preserve the game and prevent it from going offline due to lack of funding, employees leaving because they had not been paid, etc.,” the report says.

But as part of the agreement, CMG reserves the right to repurchase Resistance. It would need to repay the $300,000 that FSS paid to take over the game, plus 10 percent, within the first year.

The Receiver must now either ratify the deal with Fresh Start, or the CME shareholders must act to repay FSS and nullify the arrangement. Assuming that Resistance stays with Fresh Start its development can continue unencumbered. In fact, the company released a new update for the game just yesterday.

What is next for Cheyenne Mountain? The company is awaiting dispensation on a $3 million state tax credit to ease some of its immediate debt. Otherwise, its only income is in royalties from Stargate: Resistance paid by Fresh Start, tied to the game’s net receipts.

CME remains in litigation over both its rightful leadership and a February 12 bankruptcy filing. The receiver is evaluating whether it makes sense to keep the company in bankruptcy court, and may request that the bankruptcy petition be withdrawn if he deems that it is not in the company’s best interests.

(Thanks to Aaron at SG Gaming Info for the tip)

Darren created GateWorld in 1999, and today is the owner and managing editor. He lives in the Seattle area with his wife and three children. (More)

COMMENTS (31):Rules | Report Comment | Trackback

  • MMO development is not to be messed with. It is the single most expensive game development project a studio could undertake.

    Seriously, MGN should never have allowed development for a SG MMO to begin without an existing Stargate presence in video games. I hate seeing this news. But it’s to be expected. Start small, then once you have a foothold on how to use the license in a video game format, then you can expand to other endeavors.

    *tsk* best of luck CME & FSS

  • wow I can not believe it once again we get left waiting for nothing. Hope that whoever ends up buying the stargate franchise does a better job than MGM

  • Fantastic. What a giant let down for all the fans who stuck through their bulls**t cover-ups and tried to stay positive. MGM, don’t EVER let a bunch of inexperienced, incompetent developers touch Stargate again. Stargate Resistance sucks, and I refuse to purchase it. We deserve better. We deserve WAY better.

  • MGM needs to give the Stargate videogame license to qualified and experienced developers. And I agree with Mrja84, they should not start with an mmo. Start with a FPS or something easier to develop to build up the fanbase. I’d love to see a Bioware-developed Stargate game.

  • I saw this coming for a long long time; I’ll give them credit for limping this long though lol.

    Although, it seems that ‘Fresh Start’ knows what they’re doing, looking at what the updates fixed. It actually inspires me to want and play the game again. We’ll see where it goes with Resistance I suppose.

    But seriously, MGM cant find 10 people to put together a kick ass stargate game… I actually wrote up a design document a long time ago for a stargate space combat game, hoping by some act of god that MGM would notice it and use it lol (type ‘Sargate: Battles – Design Document’ in google if interested – some things have been changed, but overall the same concept)

    On a side note though, I think they should have Valve make a stargate game, now that would be sweet ;)

  • No kidding, I completely agree with Mrja84 and JohnSN7. Start small and build up. Stargate SG-1 The Alliance may have been a great start had it actually made it to retail shelves. An MMO, however a great idea considering the series, should have been handled by a more experienced developer not to mention the financial power to actually complete from start to finish.

  • Wow things go from bad to worse for CME. Oh and a Bioware made Stargate Game = WIN!

  • CME, and Firesky just need to release the source code for Stargate Worlds, and make it a community maintained project.

  • I would like to point out that SGR will continue past this and it is only the studio i name only closing to my understanding.

  • MGM’s choice in developers for Stargate games has been poor to say the least. JoWood has garnered a bit of a reputation of bullying their development teams around and releasing incomplete, bugged software; CME had no prior experience and was a questionable choice of an MMO for a first-time project.

    MGM needs to shop around for a reputable development team if they want to break into the medium anytime soon. EA would seem a safe bet at this point, and they’ve mostly shaken off their “evil empire” reputation after Activision basically claimed that stigma as their own.

    As long as they go with anybody but Activision.

  • I would have started out with a Single Player game for both CONSOLES and Computers . Some with a full story line to it .. Some things that would take you in the world of STARGATE SG-1 . maybe have it fully co-op style game where you and 3 friends could play threw the game as the main characters .

    Heck they have the best story line for the game , Take the main plots from season 1 to season 8 with some side missions for fun . the main story was for the SG-1 Team was to explore and find new technology to help defeat the Goa’uld . Have it where each stage or planet or area you go to have a battle with a main Goa’uld .

    This would have been a much better system then an MMO to start off with .

    Each character would have had there own thing as well .

    Jack – the leader of the team , would have the P-90 as could command the team . More of a tactical guy .

    Daniel – The brains of the team , would be used to find out what different signs are or how to read scrolls and other things with in planets .

    Sam – the Scientist in the group , she would be able to build up technology ( hidden things around the worlds .

    Teal’c – The Jafa , would be more of a Snipper type of guy or heavy gunner . He would be the one with the Staff weapon .

    This type of game would be great as a Over the Shoulder or Third Person view type of game . With a COVER base system in it , like Uncharted or Army of two style ..

    With that they could still have made there Online section of the game where it could have been 8 vs 8 or 16 v 16 , where you could have taken sections of each world and made it to a nice size map to battle on with friends .

    MMO for a first game takes to much time and to much money if you don’t have something else bringing in money . STARGATE games aren’t dead , but they need a real studio to develop it .

  • they will never come up with that money. EVER. this so called studio will never release any stargate games.

  • @ PITBULL831

    Personally, I think they should do it like the new Ghostbusters game, in that you play a new member of SG-1 (perhaps a replacement for Carter), sometime after Season 5 of SGA.

    I’d rather go out exploring WITH SG-1 than BE SG-1.

  • Well this is just great!
    Waitin for a good few years for this to be let down. . . AGAIN!
    Resistance better not fall through ether because i actually enjoy playing it!

  • Thats what happens when you aim WAY higher than you can ever reach. I called this long time ago. Next time, MGM, make a deal with someone that actually knows how to make games, yeah?

  • As a person massively against MMO’s, I think this is good news. Why not give us a contained story based game where it’s first person featuring characters we already know and give a damn about.

    Oh, wait, that was The Alliance and it, too, failed. I’m starting to think a good Stargate game is never going to happen. It seems to be a curse for this franchise.

  • I think Stargate is easily right up there with Star Trek & Star Wars (and Babylon 5, for that matter) in terms what the franchise’s universe has to offer for game content to be built off of. But at the same time, it’s also a game developer’s Achilles’ Heel because it is so big and overwhelming.

    If done properly with the right developer/publisher and enough time and money, it could be an amazing gaming experience. For that reason, I’m really looking forward to seeing what Bioware does with Star Wars next year when it comes out.

  • I’m absolutely sure that a good team of developers (Bioware is my favorite) would be able to make a high-quality Stargate game. There’s so much lore, mythology, and richness to the story that it would work beautifully. MGM just has poor judgement when selecting videogame developers.

  • I hope they can sought this messed out, but I do still think that MMO is the right place to take Stargate in, Stargate is gigantic universe an the Stargate effectively makes it unlimited.
    I wish I had the money to buy the company, relocate it the UK an begin development again, I probably do it better than those guys. An you can be a new developer an developed perfectly good games, so it was not that cause the problems it was the management of the company.

  • there has to be some way to help them get the game back on track . this could be as big as or bigger the world of warcaft if it could get some more money to get it done .

  • Hope this isn’t going to be the end of Stargate Worlds.

  • I expected this. What kinda of idiot would even loan them the start up capital if their first project was going to be an MMO.

  • (Laughs) Again, I laugh at this studio. They could of made anything, and they made a third-person piece of crap with no single player. Um, hello, what the hell are you thinking? Why is someone going to play this junk if they already have a wide selection of good games? OH! It’s because it’s in the Stargate world, so, it’s got to bring in the fans, right? RIGHT? RIIIIGHT!?

  • 16.2 million in debt, only 10k in the bank, no employees, ownership in dispute and the doors about to be locked up…. does anyone still doubt that this project is doomed?

    Ive said it before and I will say it again, MMOs based on preexisting franchises are deliberate attempts to bank on the popularity of said franchise and put out a sub par product. One can only hope that game studios that engage in this sort of intent suffer similar fates.

  • What I want to see is a GOOD SG-1 FPS, where you play through a campaign as a new member of SG-1, along side Cam, Vala, Daniel etc. The campaign would be based around looking for new tech off world and we could visit some of the classic environments from the history of the game. It would also be an easy way to introduce with lots of varieties of enemies rather than just Jaffa.

    However it would also have awesome team based online multiplayer. Where you can pick from a selection of races such as Go’uld, Jaffa, Ori, Humans, Wraith etc etc.

    I suggest they just give the license to Infinity Ward and let them rattle out a revamped version of Modern Warfare 2 with Stargate graphics etc as they seem to have the FPS genre pretty much under control.

    Lets face it, it would be awesome and probably take only a year or so to develop because the game engine, most of the animation and all of the human weapons are already done. Simply just a case of coming up with a few maps, some textures and character models (I’m sure it’s more complicated than that in reality but not by much).

    It’s practically just a mod of what they already have.

    I just want a freaking Stargate game already! Is that so much to ask?

  • Stargate games are doomed to fail.
    At least when given into the hands of either unexperienced people or people that are not really fans.

    Weird that MGM does not verify if teams that start on a stargate game are actually up for the task.

    As mentioned before it would be really nice to have a nice game set in the stargate world.
    Preferably you would shoose a character of a newly formed sg team and go on an epic stargate rollercoaster, meeting characters and locations from the series along the way and ofcourse new characters and location.

    Just needs decent planning, good story writers and a team that know what they are doing.

    And if they see that things go well and they can figure out how to balance all the stargate weapons and so forth (wich is a pain lets be honest :) ) , if all goes well perhaps then they can also add a multiplayer component.

    Because we all love to kick eachothers goa’uld/ wraith , replicator , ori and tauri asses online.

  • Yep, starting with an MMO is a really really bad idea. If they’d started with Resistance and then if that worked out moved on to Worlds, then they might have had a higher chance of succeeding or at least the company might still be afloat with Resistance rather than in serious debt.

    That said, I’d prefer to start out with a decent RPG, in the style of Bioware. Oh well, at least I have Mass Effect, that keeps me plenty busy :D

  • Really, must money drive everything that happens in the SG universe? Not only are all the series highly susceptible to the need to post ratings and satisfy the studio managers (I know all series are, but I bet the Stargate creators have had to make quite a few more concessions to the “market forces” than usual), but every single Stargate endeavor so far has received very little in the way of funding (perhaps Universe doesn’t have budget issues, but the other series and the films sure did, and you could often see it onscreen, too). This, apparently, extends to the game. Had the studio been interested in producing a quality game, they would have paid for it. I keep saying, however unpleasant it is, that the owners of Stargate don’t care about anything but the bottom line of their income statements. Kinda sad for us fans who have stuck with SG for over a decade now…

  • I have no problem with the devs. Bu I have been collecting video games for 20+ years so I might have a good eye for games.

    1 I never saw or herd of there game at E3 or any other show.

    2. There was no WOW footage…. I mean there must not have been since I never saw it and something that awesome would have been un escapable hype.

    3 they did not seem to get enough hype on any stargate game by MGM or who ever ther epublish was to make a splash.

    3 the game seems to have been in 3rd person. A stargate game should most likely have been in 1st person with some RPG/adventure elements like borderlans/ metroid prime. Who wants to fire a p-90 in 3rd person? That is the shows main weapons fire weapons.

    4. I don’t care much for halo….but seriously if one game remided me of stargate it would be hao they should have just made a good halo clone with stargate elements and wowed people with it but they did not. That is why chronicals of Riddick got tons of attention besides being a TV/movie game.

    IT was good but not reinventing the whell it wowed them got people talking.

    SO I am not surprised to see they went under, MGM/ there publisher did not support t hem much or the MMO game, I never even knew it came out or cared I did not even see the game.

  • I think everyone is forgetting the simple fact that they were already screwed but not because of the franchise or because of how they build the games or even because of the fandom’s constant and unending doubt of their success from the very start, but because of the guy that had been running their company all this time, the man that’s being sued by all involved parties, that screwed Cheyenne Mountain over financially for his own personal benefit and, basically, ran the company into the ground.
    Everyone can blame whoever it is they think should take the blame for the game not coming out but at the end of the day, the only true party at fault was their back-stabbing leadership. If it wasn’t for that and MGM’s own financial issues, this would have never happened. Thinking that this happened any other way is just being blinded by the fandom.

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