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.”
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)
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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.